Preen Corporation Acquired a 60% Interest in Shino Corporation at a Cost

question 20

Essay

Preen Corporation acquired a 60% interest in Shino Corporation at a cost equal to 60% of the book value of Shino's net assets in 2014.At the time of acquisition,the book value and fair value of Shino's assets and liabilities were equal.During 2015,Preen sold $120,000 of merchandise to Shino.All intercompany sales are made at 150% of Preen's cost.Shino's beginning and ending inventories resulting from intercompany sales for 2015 were $60,000 and $36,000,respectively.Income statement information for both companies for 2015 is as follows:
Required:
Prepare a consolidated income statement for Preen Corporation and Subsidiary for 2015.

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Definitions:

Otolithic Membrane

A structure found in the vestibular system, responsible for sensing changes in linear acceleration and head position.

Tectorial Membrane

A structure located within the inner ear, playing a critical role in the detection of sound vibrations by the hair cells.

Vestibular Nucleus

A cluster of neurons in the brainstem that plays a crucial role in processing information related to balance and spatial orientation from the inner ear.

Extrinsic Eye Muscles

The six muscles located outside the eye that control its movement and positioning.