Consolidation several years subsequent to date of acquisition-Equity method Assume a parent company acquired a subsidiary on January 1, 2017. The purchase price was $820,000 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 Amount [A] Asset Property, plant and equipment (PPE), net $240,000 12 years Patent License 240,000 8 years 160,000 10 years 180,000 Indefinite Goodwill $820,000 Income statement Sales Cost of goods sold Gross profit Equity income Operating expenses Net income Statement of retained earnings BOY retained earnings Net income 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, 2019, are as follows: Parent Subsidiary Parent Subsidiary Dividends Ending retained earnings Original Useful Life Balance sheet $4,800,000 $1,300,000 Assets (774,000) Cash (3,500,000) 1,300,000 120,000 (720,000) $700,000 1,600,000 700,000 (360,000) $1,940,000 526,000 Accounts receivable Inventory (340,000) Equity investment $186,000 Property, plant & equipment, net 680,000 Liabilities and stockholders' equity 186,000 Accounts payable (36,000) Accrued liabilities $830,000 Long-term liabilities Common stock APIC Retained earnings $720,000 1,130,000 1,450,000 1,800,000 2,900,000 780,000 $8,000,000 $1,890,000 $330,000 280,000 500,000 $760,000 $122,000 160,000 840,000 2,150,000 430,000 610,000 190,000 1,700,000 158,000 1,940,000 830,000 $8,000,000 $1,890,000

b. Show the computation to yield the $120,000 equity income reported by the parent for the year ended December 31,2019 . Do not use negative signs with your answers. c. Show the computation to yield the $1,800,000 Equity Investment account balance reported by the parent at December 31,2019. Do not use negative signs with your answers. d. Prepare the consolidation entries for the year ended December 31,2019. Consolidation several years subsequent to date of acquisition-tquity method assugned to the folowing [ () assets: has not been found to be impaired. The financial statenents of the parent and iss subsidiary for the year ended Decomber 11,2019 , are as follow: e. Prepare the consolidated spreadsheet for the year ended December 31, 2019. Use negative signs with answers in the Consolidated column for Cost of goods sold, Operating expenses and Dividends. Check