P1. A subsidiary is acquired on January 1, 2016 for $20 million in cash. The subsidiary's book value at the date of acquisition was $3 million. Following is revaluation information for the subsidiary's identiable net assets at the date of acquisition: Fair Value Book Value Identiable intangibles $ 2,000,000 Straightline, 5 years Longterm debt 100,000 Straightline, 4 years During 2016, the subsidiary reported net income of $1.5 million, and an other comprehensive loss of $10,000. The subsidiary declared and paid cash dividends of $500,000. There are no revaluation impairments in 2016. The parent uses the complete equity method to report its investment on its own books. Required a. Calculate equity in net income, reported on the parent's books. b. Prepare the parent's entries to account for the investment during 2016. c. What is the December 31, 2016 balance in the investment account, reported on the parent's books? a. Reported net income $1, Amortization of ID intangibles Bond premium amortization 25, Equity in net income 1,125,000