Answer Happy

sit Summary income statement information for Pas Corporation and its 80 percent-owned subsidiary, Sit, for the year 2012 is as follows (in thousands): Pas Sales $2,500 $900 Income from Sit 80 Cost of sales 1,500 500 Depreciation expense 150 70 Other expenses 415 160 Net income $_515 $170 Instructions 1. Assume that Pas acquired its 80 percent interest in Sit at book value on January 1, 2011, when the fair value of Sits' assets and liabilities were equal to recorded book values. There were no intercompany transactions during 2011 and 2012. Prepare a consolidated income statement for Pas Corporation and Subsidiary for 2012. 2. Assume that Pas acquired its 80 percent interest in Sit on January 1, 2011, for $280,000 $60,000 was allocated to a reduction of overvalued equipment with a five- year remaining useful life and the remainder was allocated to goodwill, Sit's book value was $320,000. There were no intercompany transactions during 2011 and 2012 Prepare a consolidated income statement for Pas Corporation and Subsidiary for 2012