Gross pro?t: separate ?rms versus consolidated. Solvent is an 80%-owned subsidiary of the Painter Company. The two af?liates had the following separate income statements for 20X1 and 20X2:
| |
Solvent Company |
Painter Company |
|
|
20X1
|
20X2
|
20X1
|
20X2
|
|
Sales revenue
|
$250,000
|
$300,000
|
$500,000
|
$540,000
|
|
Cost of goods sold
|
150,000
|
180,000
|
310,000
|
360,000
|
|
Gross pro?t
|
$100,000
|
$120,000
|
$190,000
|
$180,000
|
|
Expenses
|
45,000
|
56,000
|
120,000
|
125,000
|
|
Net income
|
$ 55,000
|
$ 64,000
|
$ 70,000
|
$ 55,000
|
Solvent sells at the same gross pro?t percentage to all customers. During 20X1, Solvent sold goods to Painter for the ?rst time in the amount of $100,000. $20,000 of these sales remained in Painter's ending inventory. During 20X2, sales to Painter by Solvent were $110,000, of which $30,000 sales were still in Painter's December 31, 20X2, inventory.
Prepare consolidated income statements including the distribution of income to the controlling and noncontrolling interests for 20X1 and 20X2.