On January $1,2023,$ Pinnacle Corporation exchanged $$3,415,000$ cash for $100$ percent of the outstanding voting stock of Strata Corporation. On the acquisition date, Strata had the following balance sheet:

Pinnacle prepared the following fair$-$value allocation:$$324,000(113,000)$$$3,415,0002,790,000$$$625,000211,000$$$414,000$

At the acquisition date, Strata's buildings had a $10-$year remaining life and its licensing agreements were due to expire in $5$ years. On December $31,2024,$ Strata's accounts payable included an $$86,200$ current liability owed to Pinnacle. Strata Corporation continues its separate legal existence as a wholly owned subsidiary of Pinnacle with independent accounting records. Pinnacle employs the initial value method in its internal accounting for its investment in Strata.

The separate financial statements for the two companies for the year ending December $31,2024,$ follow. Credit balances are indicated by parentheses.$\backslash$table$[[$Accounts$,$Pinnacle,Strata$],[$Sales$,$$$(7,507,000),$$$(3,500,000).$

Required:

A$.$ Prepare a worksheet to consolidate the financial information for these two companies

B$.$ Compute the following amounts that would appear on pinnacles $2024$ separte nonconsolidated finacial records if pinnacles investment accounting was based jn the equity method.

Subsidairy income

Retained earnings $1/1/24$

Investment in strata

C$.$ What effect does the parents internal investment accounting method have in its consolidated financial statements