Preparing a consolidated income statement - with noncontrolling interest, but no AAP or intercompany profits A parent company purchased an 80% interest in its subsidiary several years ago with no AAP (i.e., purchased at book value). Each reports the following income statement for the current year.

	Parent	Subsidiary
Income statement:
Sales	$25,000,000	$3,750,000
Cost of goods sold	17,500,000	2,250,000
Gross profit	7,500,000	1,500,000
Income (loss) from subsidiary	420,000	0
Operating expenses	4,750,000	975,000
Net income	$3,170,000	$525,000

a. Compute the Income (loss) from a subsidiary of $420,000 reported by the parent company.

AnswerNet income net income attributable to noncontrolling interest set income attributable to parent net income of subsidiary parents ownership percentage	Answer
AnswerNet income net income attributable to noncontrolling interest set income attributable to parent net income of subsidiary parents ownership percentage	Answer	%
Income (loss) from subsidiary	Answer

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

Do not use negative signs with your answers.

Consolidated Income Statement
Sales	Answer
Cost of goods sold	Answer
Gross profit	Answer
Income (loss) from subsidiary	Answer
Operating expenses	Answer
AnswerNet income net income attributable to noncontrolling interest set income attributable to parent net income of subsidiary	Answer
AnswerNet income net income attributable to noncontrolling interest set income attributable to parent net income of subsidiary	Answer
AnswerNet income net income attributable to noncontrolling interest set income attributable to parent net income of subsidiary	Answer