Consolidated income statement (sale of asset sold upstream 2 years earlier)A summary of th...

Consolidated income statement (sale of asset sold upstream 2 years earlier)

A summary of the separate income of Pod Corporation and the net income of its 75 percent-owned subsidiary, Sev Corporation, for 2011 is as follows:

Sev Corporation sold machinery with a book value of $40,000 to Pod Corporation for $65,000 on January 2, 2009. At the time of the intercompany sale, the machinery had a remaining useful life of five years. Pod uses straight-line depreciation. Pod used the machinery until December 28, 2011, when it was sold to another entity for $36,000.

REQUIRED: Prepare a consolidated income statement for Pod Corporation and Subsidiary for 2011.