Answer Happy

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 17,500,000 2,250,000 Cost of goods sold 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 subsidiary of $420,000 reported by the parent company. 0 0 % Income (loss) from subsidiary $ 0 b. Prepare the consolidated income statement for the current year. Do not use negative signs with your answers. Consolidated Income Statement Sales 0 Cost of goods sold 0 Gross profit 0 Income (loss) from subsidiary 0 Operating expenses 0 ♦ 0 0 + $ 0 of the qunction