Fixed asset sales by parent and subsidiary. The separate income statements of Dark Company and its 90%-owned subsidiary, Light Company, for the year ended December 31, 20X2, are as follows:
|
|
Dark Company
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Light Company
|
|
Sales
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$ 700,000
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$ 280,000
|
|
Cost of goods sold
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(450,000)
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(190,000)
|
|
Gross pro?t
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$ 250,000
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$ 90,000
|
|
Other expenses
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(180,000)
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(70,000)
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|
Other income
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20,000
|
|
|
Operating income
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$ 90,000
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$ 20,000
|
|
Subsidiary income
|
18,000
|
|
|
Net income .
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$ 108,000
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$ 20,000
|
The following additional facts apply:
a. On January 1, 20X1, Light Company purchased a building, with a book value of $100,000 and an estimated 20-year life, from Dark Company for $180,000. The building was being depreciated on a straight-line basis with no salvage value.
b. On January 1, 20X2, Light Company sold a machine with a book value of $50,000 to Dark Company for $60,000. The machine had an expected life of 5 years and is being depreciated on a straight-line basis with no salvage value. Light Company is a dealer for the machine.
Prepare the December 31, 20X2, consolidated income statement and supporting income distribution schedules.