Parent purchased 100% of Subsidiary on January 1, 2016. The excess of investment cost over book value of $180,000 was allocated entirely to a 10-year royalty agreement. The Subsidiary's retained earnings balance on the date of acquisition was $1,508,900. The Parent uses the cost method to account for its pre-consolidation investment in the Subsidiary. Subsidiary regularly sells merchandise to Parent. In 2017, inter-company sales amounted to S96,230, with $22,450 of deferred profit remaining in ending inventory. Year-end inter-company receivables/payables amounted to S30,400. In 2018, inter-company sales amounted to $99,450 with S29,330 of deferred profit remaining in ending inventory. Year-end inter-company receivables/payables amounted to S42,800. Financial statements of Parent and Subsidiary for the year ended December 31, 2018 are presented below. Parent S 8,604,000 $2,618,700 Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Income (loss) from subsidiary Net Income 2,639,300 (1,434,600) 1,087.430 (756,770) S 330,660 s 3,672,310 1,280,770 Retained Earnings, 1/1/18 Net income Dividends Retained Earnings, 1231/18 $1,940,780 330,660 (76,070) 2195.37O Cash and receivables Inventory Equity Investment Property, Plant&Equipment (Net) Total Assets S 1,757,420 1,603,610 2,118,070 $1,140,790 988,220 1859500 3.988.510 14.284 .160 Accounts payable Accrued liabilities Notes payable Common stock Additional paid-in capital Retained Earnings, 12/31/18 Total Liabilities and Equities 1,247,660 1,402,050 3,550,000 1,502,640 1,914,310 S 233,720 406,650 723,600 114,130 315,040 2.195,370 REQUIRED: a. Prepare a schedule showing the computation of the [ADJ] consolidating entry necessary for 2018. b. Prepare the consolidation entries for 2018. c. Determine the consolidated balances for the following items: 1. Sales Revenue 2. Net Income 3. Retained Earnings, 12/31/2018 4. Cash and Receivables 5. Royalty 6. Equity Investment 7. Common Stock