Determine Method, Consolidated Workpaper, Wholly Owned Subsidiary Parry Corporation acquired a 100% interest in Sent Company on January 1, 2002, paying $140,000. Financial statement data for the two companies for the year ended December 31, 2002 follow: LO6 Income Statement Parry Sent Sales $476,000 $154,500 Cost of Goods Sold 285,600 121,000 Other Expense 45,500 29,500 Dividend Income 3,500 —0—
Retained Earnings Statement Balance, 1/1 76,000 19,500 Net Income 148,400 4,000 Dividends Declared 17,500 3,500 Balance Sheet Cash 84,400 29,000 Accounts Receivable 76,000 56,500 Inventory 49,500 36,500 Investment in Sent Company 140,000 —0—
Land 4,000 12,000 Accounts Payable 27,000 14,000 Common Stock 120,000 100,000 Retained Earnings 206,900 20,000 Required:
A. What method is being used by Parry to account for its investment in Sent Company? How can you tell?

B. Prepare a workpaper for the preparation of consolidated financial statements on December 31, 2002. Any difference between the cost of the investment and the book value of equity acquired relates to subsidiary land.