Attached to this question are two partially completed worksheets for Par and its 80%-owned Sub on December 31, 2025. These are available to you as Excel worksheets. One of these worksheets has been prepared assuming that Par has used the cost method for its investment. The other worksheet omits any investment value or investment income. You may complete this worksheet.

Par bought its investment in Sub for $105,000 on June 30, 2023. At that date, the stockholders' equity of Sub comprised common stock of $50,000, additional paid-in capital of $20,000, and retained earnings of $5,000. At the acquisition date, book value equaled fair value for Sub's assets and liabilities except for the following assets:

Par Value
	Book Value	Fair Value
Inventory	$20,000	$25,000
Equipment	50,000	70,000
Investments	30,000	35,000

The inventory was sold in 2023. The investments were sold on December 31, 2025. The equipment had a remaining five-year useful life from the acquisition date and is still owned. Goodwill, if any, is not impaired. The minority interest was valued at $22,000 at the acquisition date. Taxation issues may be ignored.

Par bills Sub $2,000 a month for management fees under a management contract. Management fees for December 2025 will be paid by Sub in January 2026. All accounting for these fees has been correctly performed by both parties.

Required

a) Complete a consolidated worksheet.

b) In your submitted workings show the computation of the following directly:

1. the investment in the subsidiary and the investment income computed on an equity basis
2. the non-controlling interest and the non-controlling interest in income.

Note that you need to complete only one of the worksheets. The second worksheet is for your convenience to use if you do not want to do the consolidation using the cost method. If you use the second worksheet, you will have to determine the equity income and the investment under the equity method and complete that worksheet. (You may want to do that anyway!) Alternatively, you can change desired numbers in the cost method worksheet. You may amend these worksheets in any way that you wish to include extra rows or columns.

In completing the worksheet, you must show your work in a separate tab or file to be considered for partial credit. Your work is crucial even if you do not complete the worksheet. Your process will be reviewed. When you are ready to submit your consolidated worksheet, select Choose a File to upload it.

You must provide worksheet entries. These do not need to follow your book's process, but a very brief explanation must accompany each entry to identify its purpose. A "plug" journal entry will not receive full credit.

COST METHOD WORKSHEET
INCOME STATEMENT
	PAR	SUB	Adjustments		Consolidated
Operating income	(60,000)	(160,000)
Expenses
Management fees	-	24,000
General expenses	28,000	88,000
Depreciation	-	8,000
Net gain on sale	-	(10,000)
Interest	10,000	5,000
Total expenses	38,000	115,000
Dividend income	(8,000)	-
	.	.
Net income	(30,000)	(45,000)
MOVEMENTS ON RETAINED EARNINGS
Retained earnings 1.1	(24,000)	(55,000)
Net income for the year	(30,000)	(45,000)
	(54,000)	(100,000)
Dividends paid	2,000	10,000
Retained earnings 12.31	(52,000)	(90,000)
BALANCE SHEET
Cash	15,000	28,000
Accounts receivable	8,000	90,000
Equipment	-	140,000
less acc.depreciation	-	(38,000)
Investment	105,000	-
Total	128,000	220,000
Accounts payable	(26,000)	(60,000)
Stockholders equity
Common stock	(20,000)	(50,000)
Paid in Capital	(30,000)	(20,000)
Retained earnings	(52,000)	(90,000)
Total	(128,000)	(220,000)