Proman Manufacturing Owns a 90% Interest in Sipp Company, Purchased

Essay

Proman Manufacturing owns a 90% interest in Sipp Company, purchased at a time when the book values of Sipp's recorded assets and liabilities were equal to fair values.During 2011, Sipp sold merchandise to Proman for $80,000 at a 20% gross profit.At December 31, 2011, 25% of this merchandise is still in Proman's inventory.Separate incomes for Proman and Sipp are summarized as follows:
Required: Prepare a consolidated income statement for 2011 for Proman and subsidiary.