Peel Corporation acquired a 80% interest in Sitt Corporation at a cost equal to 80% of th

Peel Corporation acquired a 80% interest in Sitt Corporation at a cost equal to 80% of th

 Peel Corporation acquired a 80% interest in Sitt Corporation at a cost equal to 80% of the book value of Sitt several years ago.  At the time of purchase, the fair value and book value of Sitt's assets and liabilities were equal. Sitt purchases its entire inventory from Peel at 150% of Peel's cost. During 2011, Peel sold $190,000 of merchandise to Sitt. Sitt's beginning and ending inventories for 2011 were $72,000 and $66,000, respectively. Income statement information for both companies for 2011 is as follows:

 

PeelSitt

Sales Revenue$820,000$440,000

Investment income from Sitt146,000

Cost of Goods Sold(460,000)(165,000)

Expenses(120,000)(95,000)

Net Income$386,000 $180,000

 

Required:

Prepare a consolidated income statement for Peel Corporation and Subsidiary for 2011.