In the simple consolidation problem in the chapter, we assumed that Parent Co. established Subsidiary Co. on December 31, 20X9, by investing $1,000 cash in it. Refer to p. 40 to 41 for the example and provide your answer for each of the following five cases:

Case 1: Subsidiary Co. earned $100 in cash during 20X10 but did not pay any dividends. Parent Co. earned no income of its own in 20X10. Continue to assume that Parent Co. uses the cost method to record its investment in Subsidiary Co. Prepare the consolidated SCI for 20X10 and consolidated SFP on December 31, 20X10, of Parent Co., and the associated adjusting entries.

Case 2: Subsidiary Co. earned $100 and paid dividends of $40, both in cash, during 20X10. Parent Co. earned no income of its own in 20X10. Continue to assume that Parent Co. uses the cost method to record its investment in Subsidiary Co. Prepare the consolidated SCI for 20X10 and consolidated SFP on December 31, 20X10, of Parent Co., and the associated adjusting entries.

Case 3: Continuing with Case 1, assume that instead of using the cost method to record its investment in Subsidiary Co., Parent Co. uses the equity method. Prepare the consolidated SCI for 20X10 and consolidated SFP on December 31, 20X10, of Parent Co., and the associated adjusting entries.

Case 4: Continuing with Case 2, assume that instead of using the cost method to record its investment in Subsidiary Co., Parent Co. uses the equity method. Prepare the consolidated SCI for 20X10 and consolidated SFP on December 31, 20X10, of Parent Co., and the associated adjusting entries.

Case 5: Continuing with Case 1, now assume that Parent Co. did not establish Subsidiary Co. on December 31, 20X9. Instead, assume that Parent Co. purchased all the shares of Subsidiary Co. from its shareholders on December 31, 20X10, by paying cash of $1,100 to them. Prepare the consolidated SCI for 20X10 and consolidated SFP on December 31, 20X10, of Parent Co. after the acquisition of Subsidiary Co., and the associated adjusting entries. What difference do you notice between the consolidated SFP in Case 1 and the consolidated SFP prepared by you now?