At the date of an 80% acquisition, a subsidiary had common stock of $100,000 and retained earnings of $16,250. Seven years later, at December 31, 2020, the subsidiary’s retained earnings had increased to $461,430. What adjustment will be made on the consolidated work-paper at December 31, 2021, to recognize the parent’s share of the cumulative undistributed profits (losses) of its subsidiary? Under which method(s) is this adjustment needed? Why?