Preparing a consolidated income statement$$Equity method with noncontrolling interest, AAP and upstream and downstream intercompany inventory profits

A parent company purchased an $80\%$ controlling interest in its subsidiary several years ago. The aggregate fair value of the controlling and noncontrolling interest was $$460,000$ in excess of the subsidiary$$s Stockholders$$ Equity on the acquisition date. This excess was assigned to a building that was estimated to be undervalued by $$276,000$ and to an unrecorded patent valued at $$184,000.$ The building asset is being depreciated over a $16-$year period and the patent is being amortized over an $8-$year period, both on the straight$-$line basis with no salvage value. During the current year, the parent and subsidiary reported a total of $$690,000$ of intercompany sales. At the beginning of the current year, there were $$48,300$ of upstream intercompany profits in the parent$$s inventory. At the end of the current year, there were $$74,750$ of downstream intercompany profits in the subsidiary$$s inventory. During the current year, the subsidiary declared and paid $$103,500$ of dividends. The parent company uses the equity method of pre$-$consolidation investment bookkeeping. Each company reports the following income statement for the current year:

ParentSubsidiaryIncome statement:Sales$$10,350,000$$$1,495,000$Cost of goods sold$(6,900,000)(690,000)$Gross profit$3,450,000805,000$Income $($loss$)$ from subsidiary$170,890-$Operating expenses$(2,760,000)(506,000)$Net income$$860,890$$$299,000$

a$.$ Compute the Income $($loss$)$ from subsidiary of $$170,890$ reported by the parent company in its preconsolidation income statement.

Do not use$$negative signs with your answers below.

Subsidiary's net incomeAnswer $1$

AAPAnswer $2$

Upstream salesAnswer $3$

Adjusted subsidiary incomeAnswer $4$

P $\%$ of interestXAnswer $5$

$\%$Answer $6$

Downstream salesAnswer $7$

Income $($loss$)$ from subsidiaryAnswer $8$

b$.$ Prepare the consolidated income statement for the current year.

Do not use$$negative signs with your answers below.

Consolidated Income StatementSalesAnswer $9$

Cost of goods soldAnswer $10$

Gross profitAnswer $11$

Operating expensesAnswer $12$

Answer $13$Net income attributable to noncontrolling interestsNet income attributable to the parentNet income

Answer $14$

Answer $15$Net income attributable to noncontrolling interestsNet income attributable to the parentNet income

Answer $16$

Answer $17$Net income attributable to noncontrolling interestsNet income attributable to the parentNet income

Answer $18$