8] Note: This problem based on Exercise 3-10: Comparative income statements of Parent Corporation and Sub Corporation for the year ended December 31, 2013, are as follows:

	Parent	Sub
Sales	$6,400,000	$2,000,000
Income from Sub	$522,000	$0
Total Revenue:	$6,922,000	$2,000,000
Less:
Cost of Goods Sold	$3,600,000	$800,000
Operating Expenses	$1,600,000	$600,000
Net Income:	$1,722,000	$600,000

ADDITIONAL INFORMATION

1. Sub is a 90 percent-owned subsidiary of Parent, acquired by Parent for $3,240,000 on January 1, 2011, when

Subs stockholders equity at book value was $2,800,000.

2. The excess of the cost of Parents investment in Sub over book value acquired was allocated $120,000 to undervalued inventories that were sold in 2011, $80,000 to undervalued equipment with a four-year remaining

useful life, and the remainder to goodwill.

R E Q U I R E D : Prepare a consolidated income statement for Parent Corporation and Subsidiary for the year

ended December 31, 2013 (note: you must calculate the amount of Goodwill first).