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Preparing a consolidated income statement$-$Cost method with noncontrolling interest and AAP

A parent company purchased a $75\%$ controlling interest in its subsidiary several years ago. The aggregate fair value of the

controlling and noncontrolling interest was $$810,000$ in excess of the subsidiary's Stockholders' Equity on the acquisition

date. This excess was assigned to a building that was estimated to be undervalued by $$450,000$ and to an unrecorded

Customer List valued at $$360,000.$ The building asset is being depreciated over a $15-$year period and the Customer List is

being amortized over a $4-$year period, both on the straight$-$line basis with no salvage value. During the current year, the

subsidiary declared and paid $$200,000$ of dividends. The parent company uses the cost method of pre$-$consolidation

investment bookkeeping. Each company reports the following income statement for the current year:

a$.$ Starting with the parent's current$-$year pre$-$consolidation net income of $$1,206,000,$ compute the amount of current$-$year

net income attributable to the parent that will be reported in the consolidated financial statements.

Do not use negative signs with your answers below.

b$.$ Prepare the consolidated income statement for the current year.

Do not use negative signs with your answers below.

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