he following table calculates the equity method balance in Mcllroy Inc.s Investment in Stinson Inc. account as of December 2015

The fair value consideration paid is increased by the Equity in Earnings of the subsidiary each year to get the investment account balance at the end of each year. The equity in earnings of the subsidiary is calculated by adjusting the reported income of the subsidiary with excess fair value amortization if any and the unrecognized profit on intra entity sales in case the sales are upstream. The adjusted income is multiplied by the percentage share of parent in the subsidiary to get the equity in earnings of the subsidiary. Any unrealized profit on downstream sales is adjusted in the Equity in earnings of the subsidiary account. The balance is then reduced by the share of dividend of the parent in the dividend declared by the subsidiary. The final balance is added to the consideration paid to get the balance in the Investment in Subsidiary account at the end of the year.

Investment in Stinson Inc. Analysis 1/1/2014 to 31/12/2015
Consideration paid )fair value) 1/1/20014		$ 372,000
Stinson Inc. Reported income for 2014	$60,000
Amortization of patents	(7,000)
Amortization (customer List)	(3,000)
Stinson Inc. adjusted 2014 income	50,000
Mclloy Inc.s Ownership percentage	60%
Deferred profit from Mcllroy Inc. 2014 downstream sales	(10,000)
Equity in earnings of Stinson Inc. 20014		20,000
Balance as on 31/12/2014		$392,000
Stinson Inc. reported income	$60,000
Amortization of patents	(7,000)
Amortization (customer list)	(3,000)
Stinson Inc adjusted 2014 income	50,000
Mclloy Inc.s Ownership percentage	60%
Mcllroy Inc. share of Stinson Inc. income	30,000
Recognized profit from Mclloy incs 2014 downstream sales	10,000
Deferred profit from Mcllroy Inc. 2015 downstream sales	(12,000)
Equity in earnings of Stinson Inc. 20014		28,000
MCllroy Inc Share of dividend in Stinson Inc 2014 (60% of 15,000)		(9,000)
Balance as on 31/12/2015		$411,000 Review the work of one other student who prepared an answer on a different element of the problem, and provide a critique using FAS 160 as a reference. (CO 3)