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QUESTION 1 Not yet answered Marked out of 25.00 P Flag question Computing the amount of equity income and preparing Dil consolidation journal entries method Assume that a parent company sells inventory to its wholly owned subsidiary. The subsidiary, ultimately, sells the nventory to customers outside of the consolidated group. You have compiled the following data for the years ending 2015 and 2016: Subsidiary Gross Profit Net Inventory on Unsold Receivable Income Sales Inventories (Payable) 2016 $150,000 $20,000 $7,000 $7,500 2015 $100,000 $25,000 $9,000 $14,000 Assume that inventory not remaining at the end of the year was sold outside of the consolidated group. The subsidiary paid $80,000 in dividends during 2016. a. How much Income (loss) from subsidiary should the parent report in its pre-consolidation income statement the year ending 2016 assuming that it uses the equity method of accounting for its Equity Investment