On January $1,2016,$ Parent Company purchased $80\%$ of the common stock of Subsidiary Company for $$316,000.$ On this date, Subsidiary had common stock, other paid$-$in capital, and retained earnings of $$40,000,$ $$120,000,$ and $$190,000,$ respectively. Net income and dividends for $2$ years for Subsidiary Company were as follows:

$$

$$

$2016$

$2017$

Net income

$$50,000$

$$90,000$

Dividends

$10,000$

$20,000$

$$

On January $1,2016,$ the only tangible assets of Subsidiary that were undervalued were inventory and building. Inventory, for which FIFO is used, was worth $$5,000$ more than cost. The inventory was sold in $2016.$ Building, which was worth $$15,000$ more than book value, has a remaining life of $8$ years, and straight$-$line depreciation is used. Any remaining excess is goodwill.

$$

Prepare Parent$$s $2016$ and $2017$ journal entries $($after the purchase has been recorded$)$ to record the transactions related to its investment in Subsidiary under the bsophisticated equity method.On January $1,2016,$ Parent Company purchased $80\%$ of the common stock of Subsidiary Company for $$316,000.$ On this date, Subsidiary had common stock, other paid$-$in capital, and retained earnings of $$40,000,$ $$120,000,$ and $$190,000,$ respectively. Net income and dividends for $2$ years for Subsidiary Company were as follows:

$$

$$

$2016$

$2017$

Net income

$$50,000$

$$90,000$

Dividends

$10,000$

$20,000$

$$

On January $1,2016,$ the only tangible assets of Subsidiary that were undervalued were inventory and building. Inventory, for which FIFO is used, was worth $$5,000$ more than cost. The inventory was sold in $2016.$ Building, which was worth $$15,000$ more than book value, has a remaining life of $8$ years, and straight$-$line depreciation is used. Any remaining excess is goodwill.

$$

Prepare Parent$$s $2016$ and $2017$ journal entries $($after the purchase has been recorded$)$ to record the transactions related to its investment in Subsidiary under the sophisticated equity method.On January $1,2016,$ Parent Company purchased $80\%$ of the common stock of Subsidiary Company for $$316,000.$ On this date, Subsidiary had common stock, other paid$-$in capital, and retained earnings of $$40,000,$ $$120,000,$ and $$190,000,$ respectively. Net income and dividends for $2$ years for Subsidiary Company were as follows:

$$

$$

$2016$

$2017$

Net income

$$50,000$

$$90,000$

Dividends

$10,000$

$20,000$

$$

On January $1,2016,$ the only tangible assets of Subsidiary that were undervalued were inventory and building. Inventory, for which FIFO is used, was worth $$5,000$ more than cost. The inventory was sold in $2016.$ Building, which was worth $$15,000$ more than book value, has a remaining life of $8$ years, and straight$-$line depreciation is used. Any remaining excess is goodwill.

$$

Prepare Parent$$s $2016$ and $2017$ journal entries $($after the purchase has been recorded$)$ to record the transactions related to its investment in Subsidiary under the sophisticated equity method.On January $1,2016,$ Parent Company purchased $80\%$ of the common stock of Subsidiary Company for $$316,000.$ On this date, Subsidiary had common stock, other paid$-$in capital, and retained earnings of $$40,000,$ $$120,000,$ and $$190,000,$ respectively. Net income and dividends for $2$ years for Subsidiary Company were as follows:

$$

$$

$2016$

$2017$

Net income

$$50,000$

$$90,000$

Dividends

$10,000$

$20,000$

$$

On January $1,2016,$ the only tangible assets of Subsidiary that were undervalued were inventory and building. Inventory, for which FIFO is used, was worth $$5,000$ more than cost. The inventory was sold in $2016.$ Building, which was worth $$15,000$ more than book value, has a remaining life of $8$ years, and straight$-$line depreciation is used. Any remaining excess is goodwill.

$$

Prepare Parent$$s $2016$ and $2017$ journal entries $($after the purchase has been recorded$)$ to record the transactions related to its investment in Subsidiary under the sophisticated equity method.