Consolidation several years subsequent to date of acquisitionEquity method Assume a parent company acquired a subsidiary on January 1, 2017. The purchase price was $820,000 in excess of the subsidiarys book value of Stockholders Equity on the acquisition date, and that excess was assigned to the following [A] assets:

[A] Asset								Original Amount			Original Useful Life
Property, plant and equipment (PPE), net								$240,000			12	years
Patent								240,000			8	years
License								160,000			10	years
Goodwill								180,000			Indefinite
								$820,000

The [A] assets with definite useful lives have been depreciated or amortized as part of the parents 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
Income statement				Balance sheet
Sales	$4,800,000	$1,300,000		Assets
Cost of goods sold	(3,500,000)	(774,000)		Cash	$720,000	$330,000
Gross profit	1,300,000	526,000		Accounts receivable	1,130,000	280,000
Equity income	120,000	-		Inventory	1,450,000	500,000
Operating expenses	(720,000)	(340,000)		Equity investment	1,800,000	-
Net income	$700,000	$186,000		Property, plant & equipment, net	2,900,000	780,000
Statement of retained earnings					$8,000,000	$1,890,000
BOY retained earnings	1,600,000	680,000		Liabilities and stockholders' equity
Net income	700,000	186,000		Accounts payable	$760,000	$122,000
Dividends	(360,000)	(36,000)		Accrued liabilities	840,000	160,000
Ending retained earnings	$1,940,000	$830,000		Long-term liabilities	2,150,000	430,000
				Common stock	610,000	190,000
				APIC	1,700,000	158,000
				Retained earnings	1,940,000	830,000
					$8,000,000	$1,890,000

Can you please show work?

a. Compute the Equity Investment balance as of January 1, 2019. 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. Subsidiary net income Less: Amortization Less: Depreciation 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. Equity investment at 1/1/16 Plus: Less: Equity investment at 12/31/16 d. Prepare the consolidation entries for the year ended December 31, 2019. Consolidation Journal Description Debit Credit [C] Equity investment (E) Common Stock APIC [A] PPE, net Patent Licenses (D) Patent Licenses 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. Consolidation Worksheet Parent Subsidiary Debit Credit Consolidated $4,800,000 $1,300,000 (3,500,000) (774,000) 1,300,000 526,000 120,000 [c] (720,000) (340,000) [D] $700,000 $186,000 Income statement Sales Cost of goods sold Gross profit Equity income Operating expenses Net income Statement of retained earnings BOY retained earnings Net income Dividends Ending retained earnings Balance sheet Assets Cash Accounts receivable Inventory Equity investment $1,600,000 700,000 (360,000) $1,940,000 $680,000 [E] 186,000 (36,000) $830,000 $720,000 1,130,000 1,450,000 1,800,000 $330,000 280,000 500,000 2,900,000 780,000 [A] PPE, net Patent Licenses Goodwill $8,000,000 $1,890,000 Liabilities and equity Accounts payable Accrued liabilities Long-term liabilities Common stock APIC Retained earnings $760,000 $122,000 840,000 160,000 2,150,000 430,000 610,000 190,000 [E] $ 1,700,000 158,000 [E] $ 1,940,000 830,000 $8,000,000 $1,890,000 $ a. Compute the Equity Investment balance as of January 1, 2019. 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. Subsidiary net income Less: Amortization Less: Depreciation 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. Equity investment at 1/1/16 Plus: Less: Equity investment at 12/31/16 d. Prepare the consolidation entries for the year ended December 31, 2019. Consolidation Journal Description Debit Credit [C] Equity investment (E) Common Stock APIC [A] PPE, net Patent Licenses (D) Patent Licenses 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. Consolidation Worksheet Parent Subsidiary Debit Credit Consolidated $4,800,000 $1,300,000 (3,500,000) (774,000) 1,300,000 526,000 120,000 [c] (720,000) (340,000) [D] $700,000 $186,000 Income statement Sales Cost of goods sold Gross profit Equity income Operating expenses Net income Statement of retained earnings BOY retained earnings Net income Dividends Ending retained earnings Balance sheet Assets Cash Accounts receivable Inventory Equity investment $1,600,000 700,000 (360,000) $1,940,000 $680,000 [E] 186,000 (36,000) $830,000 $720,000 1,130,000 1,450,000 1,800,000 $330,000 280,000 500,000 2,900,000 780,000 [A] PPE, net Patent Licenses Goodwill $8,000,000 $1,890,000 Liabilities and equity Accounts payable Accrued liabilities Long-term liabilities Common stock APIC Retained earnings $760,000 $122,000 840,000 160,000 2,150,000 430,000 610,000 190,000 [E] $ 1,700,000 158,000 [E] $ 1,940,000 830,000 $8,000,000 $1,890,000 $