PART D 1) On January 1, 2018, Panorama Corporation made the following investments: Acquired for cash, 70 percent of the outstanding common stock of Silly Corporation at $140 per share Acquired for cash, 60 percent of the outstanding common stock of Sky Corporation at $80 per share The stockholders' equity of the two companies on January 1, 2018 were as follows: Silly Corporation Sky Corporation $100,000 Common stock, par value $100 Common stock, par value $40 Capital in excess of par value Retained earnings $120,000 40,000 80,000 40,000 - After these investments were made, Panorama was able to exercise control over the operations of both companies. An analysis of the retained earnings of each company for 2018 is as follows: Panorama Silly Sky Balance January 1 $480,000 $40,000 $80,000 Net income (loss) 209,200 72,000 (24,000) Cash dividends paid (80,000) (32.000 (18.000) Balance December 31 $609,200 $80,000 $38.000 Required: 1. What entries should have been made on the books of Panorama during 2018 to record the Parent's share of subsidiary income or loss 2. What amount should be reported as consolidated retained earnings of Panorama Corporation and subsidiaries as of December 31, 2018? Why? 3. Compute the correct balances of Panorama's Investment in Silly and Investment in Sky accounts at December 31, 2018, before consolidation. (9 Marks)