\begin{tabular}{|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{9}{|l|}{ Balance sheet } \\ \hline \multicolumn{9}{|l|}{ Assets } \\ \hline Cash & $719,600 & $337,400 & & & & & $ & 0 \\ \hline Accounts receivable & 1,229,200 & 303,800 & & & & & & 0 \\ \hline Inventory & 1,624,000 & 389,900 & & & & & & 0 \\ \hline \multirow[t]{3}{*}{ Equity investment } & 1,530,550 & - & & & 0 & {[C]} & & 0 \\ \hline & & & & & 0 & {[E]} & & \\ \hline & & & & & 0 & {[A]} & & \\ \hline PPE, net & 2,923,200 & 721,000 & {[A]} & 0 & 0 & [D] & & 0 \\ \hline Patent & & & {[A]} & 0 & 0 & [D] & & 0 \\ \hline Licenses & & & {[A]} & 0 & 0 & [D] & & 0 \\ \hline \multirow[t]{2}{*}{ Goodwill } & - & - & {[A]} & 0 & & & & 0 \\ \hline & $8,026,550 & $1,752,100 & & & & & $ & 0 \\ \hline \multicolumn{9}{|l|}{ Liabilities and equity } \\ \hline Accounts payable & $702,800 & $124,600 & & & & & $ & 0 \\ \hline Accrued liabilities & 835,800 & 163,100 & & & & & & 0 \\ \hline Long-term liabilities & 2,100,000 & 436,100 & & & & & 0 & 0 \\ \hline Common stock & 527,100 & 87,500 & {[E]} & 0 & & & & 0 \\ \hline APIC & 1,776,600 & 109,200 & {[E]} & $ & & & 0 & 0 \\ \hline \multirow[t]{2}{*}{ Retained earnings } & 2,084,250 & 831,600 & & - & - & & & 0 \\ \hline & $8,026,550 & $1,752,100 & & $ & $ & & $ & 0 \\ \hline \end{tabular} Check was assigned to the following [A] assets: \begin{tabular}{|l||r|r|r|r|} \hline \multicolumn{1}{|c|}{ [A] Asset } & \multicolumn{2}{c|}{OriginalAmount} & OriginalUsefulLife \\ \hline Property, plant and equipment (PPE), net & $140,000 & 16 & years \\ \hline Patent & 245,000 & 7 & years \\ \hline License & 105,000 & 10 & years \\ \hline Goodwill & 175,000 & Indefinite \\ \hline & & $665,000 & & \\ \hline \end{tabular} 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: \begin{tabular}{|c|c|c|c|c|c|} \hline & Parent & Subsidiary & & Parent & Subsidiary \\ \hline Income statement & & & Balance sheet & & \\ \hline Sales & $4,802,000 & $1,308,300 & Assets & & \\ \hline Cost of goods sold & (3,457,300) & (784,700) & Cash & $719,600 & $337,400 \\ \hline Gross profit & 1,344,700 & 523,600 & Accounts receivable & 1,229,200 & 303,800 \\ \hline Equity income & 129,150 & & Inventory & 1,624,000 & 389,900 \\ \hline Operating expenses & (720,300) & (340,200) & Equity investment & 1,530,550 & - \\ \hline Net income & $753,550 & $183,400 & Property, plant \& equipment & 2,923,200 & 721,000 \\ \hline Statement of retained earnings & & & & $8,026,550 & $1,752,100 \\ \hline BOY retained earnings & 1,694,700 & 676,200 & Liabilities and stockholders' equity & & \\ \hline Net income & 753,550 & 183,400 & Accounts payable & $702,800 & $124,600 \\ \hline Dividends & (364,000) & (28,000) & Accrued liabilities & 835,800 & 163,100 \\ \hline \multirow[t]{5}{*}{ Ending retained earnings } & $2,084,250 & $831,600 & Long-term liabilities & 2,100,000 & 436,100 \\ \hline & & & Common stock & 527,100 & 87,500 \\ \hline & & & APIC & 1,776,600 & 109,200 \\ \hline & & & Retained earnings & 2,084,250 & 831,600 \\ \hline & & & & $8,026,550 & $1,752,100 \\ \hline \end{tabular} d. Prepare the consolidation entries for the year ended December 31, 2016. a. Compute the Equity Investment balance as of January 1, 2016. b. Show the computation to yield the $129,150 equity income reported by the parent for the year ended December 31, 2016 . Do not use negative signs with your answers. c. Show the computation to yield the $1,530,550 Equity Investment account balance reported by the parent at December 31,2016. Do not use negative signs with your answers. e. Prepare the consolidated spreadsheet for the year ended December 31, 2016. Use negative signs with answers in the Consolidated column for Cost of goods sold, Operating expenses and Dividends. Do not use negative signs with your answers. December 31, 20 \begin{tabular}{|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{9}{|l|}{ Balance sheet } \\ \hline \multicolumn{9}{|l|}{ Assets } \\ \hline Cash & $719,600 & $337,400 & & & & & $ & 0 \\ \hline Accounts receivable & 1,229,200 & 303,800 & & & & & & 0 \\ \hline Inventory & 1,624,000 & 389,900 & & & & & & 0 \\ \hline \multirow[t]{3}{*}{ Equity investment } & 1,530,550 & - & & & 0 & {[C]} & & 0 \\ \hline & & & & & 0 & {[E]} & & \\ \hline & & & & & 0 & {[A]} & & \\ \hline PPE, net & 2,923,200 & 721,000 & {[A]} & 0 & 0 & [D] & & 0 \\ \hline Patent & & & {[A]} & 0 & 0 & [D] & & 0 \\ \hline Licenses & & & {[A]} & 0 & 0 & [D] & & 0 \\ \hline \multirow[t]{2}{*}{ Goodwill } & - & - & {[A]} & 0 & & & & 0 \\ \hline & $8,026,550 & $1,752,100 & & & & & $ & 0 \\ \hline \multicolumn{9}{|l|}{ Liabilities and equity } \\ \hline Accounts payable & $702,800 & $124,600 & & & & & $ & 0 \\ \hline Accrued liabilities & 835,800 & 163,100 & & & & & & 0 \\ \hline Long-term liabilities & 2,100,000 & 436,100 & & & & & 0 & 0 \\ \hline Common stock & 527,100 & 87,500 & {[E]} & 0 & & & & 0 \\ \hline APIC & 1,776,600 & 109,200 & {[E]} & $ & & & 0 & 0 \\ \hline \multirow[t]{2}{*}{ Retained earnings } & 2,084,250 & 831,600 & & - & - & & & 0 \\ \hline & $8,026,550 & $1,752,100 & & $ & $ & & $ & 0 \\ \hline \end{tabular} Check was assigned to the following [A] assets: \begin{tabular}{|l||r|r|r|r|} \hline \multicolumn{1}{|c|}{ [A] Asset } & \multicolumn{2}{c|}{OriginalAmount} & OriginalUsefulLife \\ \hline Property, plant and equipment (PPE), net & $140,000 & 16 & years \\ \hline Patent & 245,000 & 7 & years \\ \hline License & 105,000 & 10 & years \\ \hline Goodwill & 175,000 & Indefinite \\ \hline & & $665,000 & & \\ \hline \end{tabular} 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: \begin{tabular}{|c|c|c|c|c|c|} \hline & Parent & Subsidiary & & Parent & Subsidiary \\ \hline Income statement & & & Balance sheet & & \\ \hline Sales & $4,802,000 & $1,308,300 & Assets & & \\ \hline Cost of goods sold & (3,457,300) & (784,700) & Cash & $719,600 & $337,400 \\ \hline Gross profit & 1,344,700 & 523,600 & Accounts receivable & 1,229,200 & 303,800 \\ \hline Equity income & 129,150 & & Inventory & 1,624,000 & 389,900 \\ \hline Operating expenses & (720,300) & (340,200) & Equity investment & 1,530,550 & - \\ \hline Net income & $753,550 & $183,400 & Property, plant \& equipment & 2,923,200 & 721,000 \\ \hline Statement of retained earnings & & & & $8,026,550 & $1,752,100 \\ \hline BOY retained earnings & 1,694,700 & 676,200 & Liabilities and stockholders' equity & & \\ \hline Net income & 753,550 & 183,400 & Accounts payable & $702,800 & $124,600 \\ \hline Dividends & (364,000) & (28,000) & Accrued liabilities & 835,800 & 163,100 \\ \hline \multirow[t]{5}{*}{ Ending retained earnings } & $2,084,250 & $831,600 & Long-term liabilities & 2,100,000 & 436,100 \\ \hline & & & Common stock & 527,100 & 87,500 \\ \hline & & & APIC & 1,776,600 & 109,200 \\ \hline & & & Retained earnings & 2,084,250 & 831,600 \\ \hline & & & & $8,026,550 & $1,752,100 \\ \hline \end{tabular} d. Prepare the consolidation entries for the year ended December 31, 2016. a. Compute the Equity Investment balance as of January 1, 2016. b. Show the computation to yield the $129,150 equity income reported by the parent for the year ended December 31, 2016 . Do not use negative signs with your answers. c. Show the computation to yield the $1,530,550 Equity Investment account balance reported by the parent at December 31,2016. Do not use negative signs with your answers. e. Prepare the consolidated spreadsheet for the year ended December 31, 2016. Use negative signs with answers in the Consolidated column for Cost of goods sold, Operating expenses and Dividends. Do not use negative signs with your answers. December 31, 20