Consolidated income statement (sale of asset sold upstream 2 years earlier)
A summary of the separate income of Pod Corporation and the net income of its 75 percent owned subsidiary, Sev Corporation, for 2011 is as follows:
|
Pod |
Sev |
|
|
Sales |
$500,000 |
$300,000 |
|
Gain on sale of machinery |
10,000 |
|
|
Cost of good sold |
(200,000) |
(130,000) |
|
Depreciation expense |
(50,000) |
(30,000) |
|
Other expenses |
(80,000) |
(40,000 ) |
|
Separate income (excludes |
||
|
investment income) |
$180,000 |
$100,000 |
Sev Corporation sold machinery with a book value of $40,000 to Pod Corporation for $65,000 on January 2, 2009. At the time of the intercompany sale, the machinery had a remaining useful life of five years. Pod uses straight line depreciation. Pod used the machinery until December 28, 2011, when it was sold to another entity for $36,000.
REQUIRED: Prepare a consolidated income statement for Pod Corporation and Subsidiary for 2011.