Preparing a consolidated income statementEquity method with noncontrolling interest, AAP and upstream intercompany depreciable asset profits A parent company purchased a 75% controlling interest in its subsidiary several years ago. The aggregate fair value of the controlling and noncontrolling interest was $156,000 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 $108,000 and to an unrecorded Customer List valued at $48,000. The building asset is being depreciated over a 10-year period and the Customer List is being amortized over a 5-year period, both on the straight-line basis with no salvage value. During a previous year, the subsidiary sold to the parent company a piece of depreciable property. The unconfirmed upstream gain on this intercompany transaction was $36,000 at the beginning of the current year. The upstream gain confirmed each year is $9,000. During the current year, the subsidiary declared and paid $51,000 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: Subsidiary Parent Income statement: Sales Cost of goods sold Gross profit Income (loss) from subsidiary Operating expenses Net income $6,900,000 $1,440,000 (4,440,000) (900,000) 2,460,000 540,000 126,450 (1,680,000) (360,000) $906,450 $180,000 a. Compute the Income (loss) from subsidiary of $126,450 reported by the parent company in its pre-consolidation income statement. Do not use negative signs with your answers below. Subsidiary's net income AAP $ 180,000 20,400 Confirmed upstream gain 9,000 Adjusted subsidiary income $ 168,600 P % of interest 75 % Income (loss) from subsidiary $ 126,450 b. Prepare the consolidated income statement for the current year. Do not use negative signs with your answers below. Consolidated Income Statement Sales $ 8,340,000 Cost of goods sold 5,340,000 Gross profit 3,000,000 Operating expenses 0 Net income 0 Net income attributable to noncontrolling interests = 0 Net income attributable to the parent 0