Baxter, Inc., owns 90 percent of Wisconsin, Inc., and 20 percent of Cleveland Company. Wisconsin,in turn, holds 60 percent of Clevelands outstanding stock. No excess amortization resultedfrom these acquisitions. During the current year, Cleveland sold a variety of inventory items toWisconsin for $40,000 although the original cost was $30,000. Of this total, Wisconsin still held$12,000 in inventory (at transfer price) at year-end.During this same period, Wisconsin sold merchandise to Baxter for $100,000 although theoriginal cost was only $70,000. At year-end, $40,000 of these goods (at the transfer price) was stillon hand.The initial value method was used to record each of these investments. None of the companiesholds any other investments.Using the following separate income statements, determine the figures that would appear on aconsolidated income statement:Baxter Wisconsin ClevelandSales . . . . . . . . . . . . . . . . . . . . . . . . . . $(1,000,000) $ (450,000) $ (280,000)Cost of goods sold . . . . . . . . . . . . . . . 670,000 280,000 190,000Expenses . . . . . . . . . . . . . . . . . . . . . . . 110,000 60,000 30,000Dividend income:Wisconsin . . . . . . . . . . . . . . . . . . . . (36,000) 0 0Cleveland . . . . . . . . . . . . . . . . . . . . (4,000) (12,000) 0Net income . . . . . . . . . . . . . . . . . . . . . $ (260,000) $ (122,000) $ (60,000)Baxter, Inc., owns 90 percent of Wisconsin, Inc., and 20 percent of Cleveland Company.

Wisconsin,in turn, holds 60 percent of Clevelands outstanding stock. No excess amortization resultedfrom these acquisitions. During the current year, Cleveland sold a variety of inventory items toWisconsin for $40,000 although the original cost was $30,000. Of this total, Wisconsin still held$12,000 in inventory (at transfer price) at year-end.During this same period, Wisconsin sold merchandise to Baxter for $100,000 although theoriginal cost was only $70,000. At year-end, $40,000 of these goods (at the transfer price) was stillon hand.The initial value method was used to record each of these investments. None of the companiesholds any other investments.Using the following separate income statements, determine the figures that would appear on aconsolidated income statement:Baxter Wisconsin ClevelandSales . . . . . . . . . . . . . . . . . . . . . . . . . . $(1,000,000) $ (450,000) $ (280,000)Cost of goods sold . . . . . . . . . . . . . . . 670,000 280,000 190,000Expenses . . . . . . . . . . . . . . . . . . . . . . . 110,000 60,000 30,000Dividend income:Wisconsin . . . . . . . . . . . . . . . . . . . . (36,000) 0 0Cleveland . . . . . . . . . . . . . . . . . . . . (4,000) (12,000) 0Net income . . . . . . . . . . . . . . . . . . . . . $ (260,000) $ (122,000) $ (60,000)