Assume that a parent company acquired its subsidiary on January 1, 2014, at a purchase price that was $300,000 in excess of the book value of the subsidiarys Stockholders Equity on the acquisition date. Of that excess, $200,000 was assigned to an unrecorded Patent owned by the subsidiary that is being amortized over a 10-year period. The [A] Patent asset has been amortized as part of the parents equity method accounting. The remaining $100,000 was assigned to Goodwill. In 2015, the wholly owned subsidiary sold Land to the parent for $100,000. The Land was reported on the subsidiarys balance sheet for $70,000 on the date of sale. The parent uses the equity method to account for its Equity Investment.

Financial statements of the parent and its subsidiary for the year ended December 31, 2016 are presented in d. below:

a. Show the computation to yield the $32,500 of Income (loss) from subsidiary reported by the parent for the year ended December 31, 2016.

b. Show the computation to yield the $505,675 Equity Investment account balance reported by the parent on December 31, 2016.

c. Prepare the consolidation entries for the year ended December 31, 2016.

d. Prepare the consolidation spreadsheet for the year ended December 31, 2016.