Parent purchased Subsidiary on January 1, 2020. The excess investment cost over book value of $350,000 was allocated entirely to a 7-year royalty agreement. The parent uses the equity method to account for its investment in its subsidiary. Subsidiary regularly sells merchandise to Parent. In 2021, inter-company sales amounted to $82,400, with $216,480 of deferred profit remaining in ending inventory. Year-end inter-company receivables/payables amounted to $16,000. In 2022, inter-company sales amounted to $75,000 with $37,500 of deferred profit remaining in ending inventory. Year-end inter-company receivables/payables amounted to $28,000. Financial statements of Parent and Subsidiary for the year ended December 31, 2022, are presented below.

	Parent	Subsidiary
Sales Revenue	$7,500,000	$2,450,000
Cost of Goods Sold	-5,930,000	-1,950,000
Gross Profit	1,570,000	500,000
Operating Expenses	-1,375,000	-286,000
Equity Income	142,980	0
Net Income	$337,980	$214,000
Retained Earnings, 1/1/22	$4,045,000	$1,750,000
Net income	337,980	214,000
Dividends	-85,000	-176,000
Retained Earnings, 12/31/22	$4,297,980	$1,788,000
Cash and receivables	$1,750,000	$1,145,600
Inventory	958,000	758,000
Equity Investment	2,530,000
Property, Plant & Equipment (Net)	4,562,980	1,116,590
Total Assets	$9,800,980	$3,020,190
Accounts payable	$980,000	$225,000
Accrued liabilities	142,800	376,500
Notes payable	1,010,200	51,190
Common stock	1,792,000	158,000
Additional paid-in capital	1,578,000	421,500
Retained Earnings, 12/31/22	4,297,980	1,788,000
Total Liabilities and Equities	$9,800,980	$3,020,190

Required: a. Prepare a schedule showing the computation of Income (loss) from subsidiary on Parent's pre-consolidation books for 2022. b.Prepare a schedule showing the computation of Equity Investment on Parent's pre-consolidation books at December 31, 2022. c. Prepare the consolidation entries for 2022.