Assume that, on January 1, 2019, a parent company acquired a 70% interest in its subsidiary for a purchase price that was $400,000 over the book value of the subsidiary's Stockholders' Equity on the acquisition date. The parent uses the equity method to account for its investment in the subsidiary. The parent assigned the acquisition-date AAP as follows: AAP Items Initial Fair Value Useful Life (years) PPE 400,000 10 Assume that the parent sells inventory to the subsidiary (downstream) which includes that inventory in products that it, ultimately, sells to customers outside of the controlled group. You have compiled the following data as of 2021 and 2022: 2021 2022 Transfer price for inventory sale $85,000 $125,000 Cost of goods sold -65,000 -100,000 Gross profit $20,000 $25,000 % inventory remaining 30% 30% Gross profit deferred $6,000 $7,500 EOY Receivable/Payable $18,000 $20,000 The inventory not remaining at the end of the year has been sold outside of the controlled group. The parent and the subsidiary report the following financial statements at December 31, 2022: Income Statement Parent Subsidiary Sales $3,500,000 $600,000 Cost of goods sold -2,800,000 -480,000 Gross Profit 700,000 120,000 Income (loss) from subsidiary 9,000 Operating expenses -340,000 -65,000 Net income $369,000 $55,000 Statement of Retained Earnings Parent Subsidiary BOY Retained Earnings $5,302,000 $850,000 Net income 369,000 55,000 Dividends -60,000 -18,000 EOY Retained Earnings $5,611,000 $887,000 Balance Sheet Parent Subsidiary Assets: Cash $780,000 $215,000 Accounts receivable 1,051,600 210,000 Inventory 1,250,000 195,000 Equity Investment 892,350 PPE, net 5,773,050 1,400,000 $9,747,000 $2,020,000 Liabilities and Stockholders' Equity: Current Liabilities $751,000 $500,000 Long-term Liabilities 2,070,000 474,500 Common Stock 450,000 42,000 APIC 865,000 116,500 Retained Earnings 5,611,000 887,000 $9,747,000 $2,020,000 a. Compute the EOY Equity Investment balance of $892,350 (4 years subsequent to the acquisition). b. Compute the EOY noncontrolling interest equity balance.c. Prepare the consolidation journal entries.