a. Do the parent and subsidiary companies each maintain their own financial statements? Explain. Why does GAAP require consolidation instead of separate financial statements of individual companies? What is the balance of Investments in Financial Services as of December 31, 2012, on the parent's balance sheet? What is the equity balance of the financial services subsidiary to which this relates as of December 31, 2012? Do you see a relation? Will this relation always exist? Refer to your answer for part a. How does the equity method of accounting for the investment in the subsidiary obscure the actual financial condition of the parent company as compared to the consolidated financial statements