Kelly acquired all of Constances common stock on Jan 1, 2017, in exchange for cash of $970,000. On that day, Constance reported common stock of 170,000 and retained earnings of $400,000. At. the acquisition date, $90,000 of the fair value price was attributed to undervalued land while $150,000 was assigned to undervalued equipment having a 10-year remaining life. The $160,000 unallocated portion of the acquisition date excess fair value over book value was viewed as goodwill. The following are individual financial statements for the year ending December 31, 2021. On that date, Constance owes Kelly $10,000. Credits are in parentheses.

			Kelly	Constance
			12/31/2021	12/31/2021
Revenues			(1,175,000)	(360,000)
Cost of goods sold			550,000	90,000
Depreciation expense			172,000	130,000
Equity in income of Constance			(125,000)	-
Net income			(578,000)	(140,000)
Retained earnings, 1/1/21			(1,417,000)	(620,000)
Net income			(578,000)	(140,000)
Dividends declared			310,000	110,000
Retained earnings, 12/31/21			(1,685,000)	(650,000)
Current assets			238,000	318,000
Investment in Constance			1,145,000	-
Land			440,000	165,000
Buildings (net)			304,000	419,000
Equipment (net)			648,000	286,000
Goodwill			-	-
Total assets			2,775,000	1,188,000
Liabilities			(840,000)	(368,000)
Common stock			(250,000)	(170,000)
Retained earnings			(1,685,000)	(650,000)
Total liabilities and equity			$(2,775,000)	$(1,188,000)

A a. What method of investment has Kelly been using for this investment?

b. How was Equity Income in Constance calculated for the reporting period of 2021?

c. Determine and show the calculation of how the investment balance at 12/31/2021 was derived?

d. Show the worksheet adjustment entries (S, A, I, E, D, or P) for consolidation for 12/31/2021?