167 Chapter 3 I Consolidated Financial Statements Subsequent to the Date of Acquisition Original Amount Original Useful Life A] Asset Property, plant and equipment (PPE), net.. License $140.000 245,000 105,000 175,000 16 yers 7 years 10 years Indefinite The [A] assets with definite useful lives have been depreciated or amortized as part of the parent's pre- consolidation equity method accounting. The Goodwill asset has been tested annually for impairment, and has not been found to be impaired. The financial statements of the parent and its subsidiary for the year ended December 31, 2016, are as follows: Parent Subsidiary Parent Subsidiary Income statement: Sales. Balance sheet: .$4,802,000 $1,308,300 Assets Gross profit. Equity income. Operating expenses s 719.600 337,400 303,800 389,900 523,600 Accounts receivable. 1,229,200 1,624,000 1,530,550 2,923,200 .1,344,700 129,150 (720,300) (340,200) Equity investment. Net income.........$ 753,550 S 183,400 Property, plant and equipment (PPE), net 721,000 $8,026,550 $1,752,100 Statement of retained earnings: BOY retained earnings.... $1,694,700 $ 676,200 Liabilities and stockholders' equity 183,400 Accounts payable. (28,000) Accrued liabilities. $ 702,800 124,600 163,100 436,100 87,500 109,200 831,600 $8,026,550 $1,752,100 835,800 Common stock APIC Retained earnings 527,100 1,776,600 2,084,250 Compute the Equity Investment balance as of January 1, 2016. Show the computation to yield the $129,150 equity income reported by the parent for the year ended December 31, 2016. Show the computation to yield the $1,530.550 Equity Investment account balance reported by the parent at December 31, 2016. a. b. c. d. Prepare the consolidation entries for the year ended December 31.2016 e. Prepare the consolidation spreadsheet for the year ended December 31, 2016