Pittle Corporation Acquired a 80% Interest in Seel Corporation at a Cost

Essay

Pittle Corporation acquired a 80% interest in Seel Corporation at a cost equal to 80% of the book value of Seel's net assets several years ago.At the time of purchase,the fair value and book value of Seel's assets and liabilities were equal.Pittle purchases its entire inventory from Seel at 150% of Seel's cost.During 2011,Seel sold $490,000 of merchandise to Pittle.Pittle'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:
Required:
Prepare a consolidated income statement for Pittle Corporation and Subsidiary for 2011.