Consolidation several years subsequent to date of acquisition-Equity method Assume a parent company acquired a subsidiary on January 1, 2020. The purchase price was $1,148,000 in excess of the subsidiary's book value of Stockholders' Equity on the acquisition date, and that excess was assigned to the following [A] assets: Original [A] Asset Property, plant and equipment (PPE), net Patent License Goodwill Original Useful Amount Life $336,000 12 years 336,000 8 years 224,000 10 years 252,000 Indefinite $1,148,000 The [A] assets with definite useful lives have been depreciated or amortized as part of the parent's preconsolidation equity method accounting. The Goodwill asset has been tested annually for impairment, and has not been found to be impaired. The financial statements of the parent and its subsidiary for the year ended December 31, 2022, are as follows: Parent Subsidiary Income statement Sales Balance sheet $6,720,000 $1,820,000 Assets Cost of goods sold (4,900,000) (1,083,600) Cash Parent Subsidiary $1,008,000 $462,000 Gross profit Equity income Operating expenses Net income $980,000 Statement of retained earnings 1,820,000 736,400 Accounts receivable 168,000 (1,008,000) Inventory (476,000) Equity investment $260,400 Property, plant & equipment, net 1,582,000 392,000 2,030,000 700,000 2,520,000 4,060,000 1,092,000 $11,200,000 $2,646,000 BOY retained earnings Net income Dividends 2,240,000 980,000 (504,000) 952,000 Liabilities and stockholders' equity 260,400 Accounts payable $1,064,000 $170,800 Ending retained earnings (50,400) Accrued liabilities $2,716,000 $1,162,000 Long-term liabilities Common stock APIC Retained earnings 854,000 2,380,000 221,200 2,716,000 1,162,000 1,176,000 224,000 3,010,000 602,000 266,000 $11,200,000 $2,646,000 a. Compute the Equity Investment balance as of January 1, 2022. $ 0 b. Show the computation to yield the $168,000 equity income reported by the parent for the year ended December 31, 2022. Do not use negative signs with your answers. Subsidiary net income Less: Amortization Less: Depreciation $ 0 0 0 0 $ 0 c. Show the computation to yield the $2,520,000 Equity Investment account balance reported by the parent at December 31, 2022. Do not use negative signs with your answers. Equity investment at 1/1/22 $ 0 Plus: = 0 Less: 0 $ 0 0 Equity investment at 12/31/22 d. Prepare the consolidation entries for the year ended December 31, 2022. Consolidation Journal Description Debit Credit [C] = 0 0 0 0 Equity investment 0 0 [E] Common Stock 0 0 APIC 0 0 = 0 0 0 0 [A] PPE, net 0 0 Patent 0 0 Licenses 0 0 0 0 0 0 [D] 0 0 0 0 Patent 0 0 Licenses 0 0