The standalone income statements Magenta Corporation and its wholly owned subsidiary, Vegas Co., for 2XX2 are presented below:

	Magenta	Vegas
Sale revenue	$1,560,000	$273,000
Cost of goods sold	640,000	152,000
Gross profit	920,000	121,000
Operating expenses	320,000	64,000
Net income	$600,000	$57,000

Note that Magenta's income statement includes no investment-related accounting or adjustments for Vegas. During 2XX1, Magenta sold merchandise costing $36,000 to Vegas for $80,000. At the end of 2XX1, 35% of the merchandise remained unsold by Vegas and was sold in 2XX2. During 2XX2, Magenta sold merchandise costing $27,000 to Vegas for $60,000. At the end of 2XX2, 40% of the merchandise remained unsold by Vegas.

Required Please explain how to prepare a consolidated income statement for 2XX2. Note: Use negative signs to indicate items that decrease net income.

Consolidated Income Statement
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SOLUTION To prepare a consolidated income statement ... View the full answer