Working backward to consolidation relations. Laesch Company, as parent, owns shares in Lily Company. Laesch Company has owned them since it formed Lily Company. Lily Company has never declared a dividend. Laesch Company has retained earnings from its own operations independent of intercorporate investments of $100,000. The consolidated balance sheet shows no goodwill and shows retained earnings of $156,000. 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. II' the subsidiary has retained earnings of $77,000, what fraction of the subsidiary does the parent own?

c. If the parent had not consolidated the subsidiary but instead had accounted for it using the equity method, how much revenue would the parent company have recognized from the investment?