Consolidated net income (upstream and downstream sales)
Income data from the records of Par Corporation and Sum Corporation, Par’s 80 percent owned subsidiary, for 2011 through 2014 follow (in thousands):
|
2011 |
2012 |
2013 |
2014 |
|
|
Par’s separate income |
$200 |
$150 |
$40 |
$120 |
|
Sum’s net income |
60 |
70 |
80 |
90 |
Par acquired its interest in Sum on January 1, 2011, at a price of $40,000 less than book value. The $40,000 was assigned to a reduction of plant assets with a remaining useful life of 10 years.
On July 1, 2011, Sum sold land that cost $25,000 to Par for $30,000. This land was resold by Par for $35,000 in 2014.
Par sold machinery to Sum for $100,000 on January 2, 2012. This machinery had a book value of $75,000 at the time of sale and is being depreciated by Sum at the rate of $20,000 per year.
Par’s December 31, 2013, inventory included $8,000 unrealized profit on merchandise acquired from Sum during 2013. This merchandise was sold by Par during 2014.
REQUIRED: Prepare a schedule to calculate the consolidated net income of Par Corporation and Subsidiary for each of the years 2011, 2012, 2013, and 2014.