On January 1, 2011, Plank Company purchased 80% of the outstanding capital stock of Scoba Company for $53,000. At that time, Scoba's stockholders' equity consisted of capital stock, $55,000; other contributed capital, $5,000; and retained earnings, $4,000. On December 31, 2015, the two companies' trial balances were as follows:

The accounts payable of Scoba Company include $3,000 payable to Plank Company.
Required:
A. What method is being used by Plank to account for its investment in Scoba Company? How can you tell?
B. Prepare a consolidated statements work-paper at December 31, 2015. Any difference between book value and the value implied by the purchase price relates to subsidiary land?

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22,000 Accounts Receivable Investment in Scoba Company Dividends Declared Cost of Goods Sold $305,200 Accounts Payable Other Liabilities Capital Stock Other Contributed Capital Retained Earnings, 1/1 Equity in Subsidiary Income $305,200