Comparative separate-company and consolidated balance sheets for Pod Corporation and its 70 percent-owned subsidiary, Saw Corporation, at year-end 2011 were as follows (in thousands):
| Pod | Saw | Consolidated |
Cash | $ 100 | $ 70 | $ 170 |
Inventories | 800 | 100 | 900 |
Other current assets | 500 | 130 | 630 |
Plant assets—net | 3,500 | 800 | 4,300 |
Investment in Saw | 600 | — | — |
Goodwill | — | — 40 |
|
Total assets | $5,500 | $1,100 | $6,040 |
Current liabilities | $500 | $ 300 | $ 800 |
Capital stock, $10 par | 3,000 | 500 | 3,000 |
Other paid-in capital | 1,000 | 100 | 1,000 |
Retained earnings | 1,000 | 200 | 1,000 |
Noncontrolling interest | — | — | 240 |
Total equities | $5,500 | $1,100 | $6,040 |
Saw’s net income for 2012 was $150,000, and its dividends for the year were $80,000 ($40,000 on March 1, and $40,000 on September 1). On April 1, 2012, Pod increased its interest in Saw to 80 percent by purchasing 5,000 shares in the market at $19 per share.
Separate incomes of Pod and Saw for 2012 are computed as follows:
| Pod | Saw |
Sales | $2,000 | $1,200 |
Cost of sales | (1,200) | (700) |
Gross profit | 800 | 500 |
Depreciation expense | (400) | (300) |
Other expenses | (100) | (50) |
Separate incomes | $ 300 | $ 150 |
REQUIRED
1. Prepare a consolidated income statement for the year ended December 31, 2012.
2. Prepare a schedule to show how Saw’s net income and dividends for 2012 are allocated among noncontrolling interests, controlling interests, and other interests.
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