A parent company owns shares in one other company. It has owned them since the other company

Question:

A parent company owns shares in one other company. It has owned them since the other company was formed. The parent company alone has retained earnings of $\$ 100,000$. The consolidated balance sheet shows no goodwill and retained earnings of $\$ 160,000$. Consider each of the following questions independently of the others.

a If the parent owns 80 percent of its consolidated subsidiary, what are the retained earnings of the subsidiary?

b If the subsidiary has retained earnings of $\$ 96,000$, what fraction of the subsidiary does the parent own?

c If the subsidiary had not been consolidated but instead had been accounted for by the equity method, how much revenue in excess of dividends received would the parent have recognized from the investment?

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