Parker, Inc., acquires 70 percent of Sawyer Company for $420,000.

The remaining 30 percent of Sawyer's outstanding shares continue to trade at a collective value of $174,000.

On the acquisition date, Sawyer has the following accounts:

Book Value Fair Value
Current assets $ 210,000 $ 210,000
Land 170,000 180,000
Buildings 300,000 330,000
Liabilities (280,000 ) (280,000 )
The buildings have a 10-year life.

In addition, Sawyer holds a patent worth $140,000 that has a five-year life but is not recorded on its financial records.

At the end of the year, the two companies report the following balances:

Parker Sawyer
Revenues $ (900,000 ) $ (600,000 )
Expenses 600,000 400,000
a. Assume that the acquisition took place in January.

1. What figures would appear in a consolidated income statement for this year?

b. Assume that the acquisition took place on April 1.

Sawyer's revenues and expenses occurred uniformly throughout the year.

What amounts would appear in a consolidated income statement for this year?

Exercise 6-2 variable costing income statement; explanation of difference in net operating income [lo6-2] ida sidha karya company is a family-owned company located on the island of bali in indonesia. the company produces a handcrafted balinese musical instrument called a gamelan that is similar to a xylophone. the gamelans are sold for $970. selected data for the company’s operations last year follow: units in beginning inventory 0 units produced 200 units sold 180 units in ending inventory 20 variable costs per unit: direct materials $ 130 direct labor $ 300 variable manufacturing overhead $ 30 variable selling and administrative $ 15 fixed costs: fixed manufacturing overhead $ 63,000 fixed selling and administrative $ 25,000 the absorption costing income statement prepared by the company’s accountant for last year appears below: sales $ 174,600 cost of goods sold 139,500 gross margin 35,100 selling and administrative expense 27,700 net operating income $ 7,400 required: 1. under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. prepare an income statement for last year using variable costing.