Dills Company Purchased an 80% Interest in the Common Stock

Dills Company purchased an 80% interest in the common stock of Sarada Company for $140,000 on January 1, 2018.On this date the book value of Sarada's net identifiable assets totaled $100,000.Any excess was attributed to a patent with a 10-year life.
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During 2019, Dills Company and Sarada Company reported the following internally generated income before taxes:
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$$\begin{array} { l r r } & \text { Dills Co. } & \text { Sarada Co. } \\\text { Sales } & \$ 300,000 & \$ 120,000 \\\text { Cost of goods sold } & ( 200,000 ) & ( 90,000 ) \\\text { Gain on machine } & 10,000 & - - \\\text { Expenses } & ( 40,000 ) & ( 20,000 ) \\\text { Income before taxes } & \$ 70,000 & \$ 10,000\end{array}$$ Sarada Company routinely sells goods to Dills Company.This year those sales amounted to $60,000.Dills Company inventories included intercompany goods of $30,000 at the beginning of the year and $12,000 at the end of the year.Sarada Company sells goods to Dills Company at a gross profit of 16.67%.
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On January 1, 2019 Dills Company sold a new machine to Sarada Company, for $40,000.The cost of the machine was $30,000.It has a 5-year life.
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The affiliated group files a consolidated tax return and is taxed at 30%.
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Required:
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Prepare a consolidated income statement for 2019.Include income distribution for both firms.
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