Parker, Inc., acquires 70 percent of Sawyer Company for $420,000.

The remaining 30 percent of Sawyer's outstanding shares continue to trade at a collective value of $174,000.

On the acquisition date, Sawyer has the following accounts:

Book Value Fair Value
Current assets $ 210,000 $ 210,000
Land 170,000 180,000
Buildings 300,000 330,000
Liabilities (280,000 ) (280,000 )
The buildings have a 10-year life.

In addition, Sawyer holds a patent worth $140,000 that has a five-year life but is not recorded on its financial records.

At the end of the year, the two companies report the following balances:

Parker Sawyer
Revenues $ (900,000 ) $ (600,000 )
Expenses 600,000 400,000
a. Assume that the acquisition took place in January.

1. What figures would appear in a consolidated income statement for this year?

b. Assume that the acquisition took place on April 1.

Sawyer's revenues and expenses occurred uniformly throughout the year.

What amounts would appear in a consolidated income statement for this year?