Parent purchased Subsidiary on January 1, 2014. The excess of investment cost over book value of $210,000 was allocated entirely to a 10-year royalty agreement. Subsidiary regularly sells merchandise to Parent. In 2015, inter-company sales amounted to $123,960, with $27,558 of deferred profit remaining in ending inventory. Year-end inter-company receivables/payables amounted to $40,300. In 2016, inter-company sales amounted to $123,960 with $35,330 of deferred profit remaining in ending inventory. Year-end inter-company receivables/payables amounted to $49,584. Financial statements of Parent and Subsidiary for the year ended December 31, 2016 are presented below.

Parent Subsidiary Sales revenue $ 9,864,000 $3,718,800 Cost of goods sold (6,904,800 ) (2,231,280 ) Gross profit 2,959,200 1,487,520 Operating expenses (1,874,160 ) (966,888 ) Equity income 491,860 _________ Net Income $ 1,576,900 $ 520,632 Retained Earnings, 1/1/16 $ 4,955,674 $1,921,380 Net income 1,576,900 520,632 Dividends (301,758 ) (67,682 ) Retained Earnings, 12/31/16 $ 6,230,816 $2,374,330 Cash and receivables $ 2,557,242 $2,064,790 Inventory 1,913,616 1,108,202 Equity investment 3,043,826 Property, plant & equipment (Net) 9,205,085 2,050,300 Total Assets $16,719,769 $5,223,292 Accounts payable $ 1,341,706 $ 443,876 Accrued liabilities 1,513,051 607,660 Notes payable 4,200,000 1,239,600 Common stock 1,612,764 125,280 Additional paid-in capital 1,821,432 432,546 Retained Earnings, 12/31/16 6,230,816 2,374,330 Total Liabilities and Equities $16,719,769 $5,223,292

Required: a. Prepare a schedule showing the computation of Equity Income on Parent's books for 2016.

b. Prepare a schedule showing the computation of Equity Investment on Parent's books at December 31, 2016.

c. Prepare the consolidation worksheet with entries for 2016