Consolidation at the end of the first year subsequent to date of acquisition-Cost method (purchase price equals book value) Assume the parent company acquires its subsidiary on January 1, 2019, by exchanging 20,000 shares of its $1 par value Common Stock, with a market value on the acquisition date of $50 per share, for all of the outstanding voting shares of the acquiree. You have been charged with preparing the consolidation of these two companies at the end of the first year. On the acquisition date, all of the subsidiary's assets and liabilities had fair values equaling their book values. Following are financial statements of the parent and its subsidiary for the year ended December 31, 2019. Parent Subsidiary Parent Subsidiary Income statement Sales Balance sheet Cost of goods sold Gross profit Investment income $3,400,000 $1,600,000 Assets (1,560,000) (900,000) Cash 1,840,000 $350,000 $200,000 Operating expenses 60,000 (1,300,000) 700,000 Accounts receivable Inventory Net income $600,000 (500,000) Equity investment $200,000 Property, plant & equipment 550,000 500,000 700,000 660,000 1,000,000 Statement of retained earnings 1,200,000 900,000 $3,800,000 $2,260,000 BOY retained earnings 900,000 640,000 Liabilities and stockholders' equity Net income 600,000 200,000 Accounts payable $200,000 $120,000 Dividends (250,000) (60,000) Accrued liabilities 650,000 300,000 Ending retained earnings $1,250,000 $780,000 Long-term liabilities Common stock APIC Retained earnings 700,000 600,000 160,000 1,100,000 200,000 1,250,000 780,000 $3,800,000 $2,260,000 a. Prepare the journal entry to record the acquisition of the subsidiary. b. Prepare the consolidation entries for the year ended December 31, 2019. c. Prepare the consolidated spreadsheet for the year ended December 31, 2019.