Business, 16.04.2020 22:50 brandydailey24pe8r24

A parent company purchased an 80% interest in its subsidiary several years ago with no AAP (i. e., pur-chased at book value). Each reports the following income statement for the current year:Parent SubsidiaryIncome statement:Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7,500,000 $1,125,000 Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,250,000) (675,000)Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,250,000 450,000 Income (loss) from subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,000 0Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,425,000) (292,500)Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 951,000 $157,500 a. Compute the Income (loss) from subsidiary of $126,000 reported by the parent company. b. Prepare the consolidated income statement for the current year

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A parent company purchased an 80% interest in its subsidiary several years ago with no AAP (i. e., p...

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