McDuff Company Owns 100 Percent of the Stock of Goode

question 53

Essay

McDuff Company owns 100 percent of the stock of Goode Company.The separate income statements for the two companies for the year ended December 31,2010,are as follows:
$\begin{array}{|lcc|}\hline&\text { McDuff Company } & \text { Goode Company }\\ \text { Sales } & \$ 800,000 & \$ 500,000 \\ \text { Cost of goods sold } & 650,000 & 396,000 \\ \text { Gross margin } & \$ 150,000 & \$ 104,000 \\ \text { Operating expenses, including rent } & (86,000) & (48,000) \\\text { Rental revenue } & \$ 56,000 & \text { - } \\ \text { Income taxes expense } & (44,000) & (22,000) \\\text { Net income } & \$ 76,000 & \$ 34,000 \\\hline\end{array}$ McDuff Company sold merchandise to Goode Company for $120,000,which in turn was sold by Goode Company to its customers.Goode Company paid rentals of $18,000 to McDuff Company on a long-term lease.Using the partially completed form that follows,prepare a consolidated income statement for the year ended December 31,2010.
$$\begin{array} {c} { \text { MrDuff Company } } \\{ \text { Consolidated Income statement } } \\\text { For the Year Ended December 31, 2010 } \\\begin{array} { | l | l | } \hline \text { Sales } &\quad\quad\quad\quad\quad\quad\quad\quad \\\hline \text { Cust af gadis 5ald } & \\\hline \text { Grass margin } & \\\hline \text { Operating expenses } & \\\hline \text { Rental revenue } & \\\hline \text { Income taxe5 expense } & \\\hline \text { Net income } & \\\hline\end{array}\end{array}$$

---

Definitions:

Tear Glands

Glands located around the eye that produce tears, which are necessary for lubricating the eyes and providing protection against irritants.

Rectal Temperatures

Body temperature measurements taken from the rectum, which are considered to be very accurate for assessing a person's core body temperature.

Rectal Mucosa

The lining of the rectum, which is sensitive to damage, disease, and the absorption of medications.

Meconium Stool

The first stool passed by a newborn, composed of materials ingested during the time in the uterus, including mucus, skin cells, and amniotic fluid.