Preparing a consolidated income statement - with noncontrolling interest, but no AAP or intercompany profits 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 $5,000,000 $750,000 Cost of goods sold 3,500,000 450,000 Gross profit 1,500,000 300,000 Income (loss) from subsidiary 84,000 0 Operating expenses 950,000 195,000 Net income $634,000 $105,000 a. Compute the Income (loss) from subsidiary of $84,000 reported by the parent company.

Alandowner and his neighbor purchased adjoining undeveloped lots. after both built homes on their respective lots, the landowner suggested to the neighbor that a common driveway be built where the two lots joined. the neighbor agreed. the landowner and the neighbor split the cost of constructing the driveway and entered into a written agreement to equally share the costs of its upkeep and maintenance. the agreement was recorded in the county recorder's office. two years later, the neighbor built a new driveway located entirely on his lot. the common driveway, which the landowner continued to use but which the neighbor no longer used, began to deteriorate. the landowner asked the neighbor for money to maintain the common driveway, but the neighbor refused to contribute. three years later, the neighbor conveyed his lot to a friend. the friend entered into possession and used only the driveway built by the neighbor. by this time, the common driveway had deteriorated badly and contained numerous potholes. the landowner asked the friend to pay half of what it would take to repair the common driveway. the friend refused. the landowner repaired the driveway and sued the friend for 50% of the cost of repairs. will the landowner prevail?