Please answer all parts correctly asap.

Consolidation spreadsheet for continuous sale of inventory - Equity method Assume that a parent company acquired a subsidiary on January 1, 2016. The purchase price was $600,000 in excess of the subsidiarys book value of Stockholders Equity on the acquisition date, and that excess was assigned to the following AAP assets:

The AAP assets with a definite useful life have been amortized as part of the parents equity method accounting. The Goodwill asset has been tested annually for impairment, and has not been found to be impaired.

Assume that the parent company sells inventory to its wholly owned subsidiary. The subsidiary, ultimately, sells the inventory to customers outside of the consolidated group. You have compiled the following data for the years ending 2018 and 2019:

The inventory not remaining at the end of the year has been sold to unaffiliated entities outside of the consolidated group. The parent uses the equity method to account for its Equity Investment.

The financial statements of the parent and its subsidiary for the year ended December 31, 2019, follow in part d. below.

a. Show the computation to yield the pre-consolidation $80,400 Income loss from subsidiary reported by the parent during 2019.

Note: Use negative signs with answers when appropriate.

b. Show the computation to yield the Equity Investment balance of $1,152,000 reported by the parent at December 31, 2019.

Note: Use negative signs with answers when appropriate.

c. Prepare the consolidation entries for the year ended December 31, 2019.

d. Prepare the consolidation spreadsheet for the year ended December 31, 2019. Hint: Use negative signs with answers when appropriate.

Original Original Useful AAP Asset Amount Life (years) Property, plant and equipment (PPE), net $120,000 20 Customer list 210,000 10 Royalty agreement 150,000 10 Goodwill 120,000 indefinite $600,000 Gross Profit Remaining Inventory in Unsold Receivable Sales Inventory (Payable) $81,600 $24,000 $32,400 2019 2018 $51,600 $14,400 $15,600 0 0 > Net income of subsidiary Plus: Prior year intercompany gross profit Less: Current year intercompany gross profit AAP depreciation Income (loss) from subsidiary 0 0 0 0 0 0 Common stock APIC Retained earnings BOY unamortized AAP BOY deferred profit Income (loss) from subsidiary Dividends 0 0 0 0 Equity investment 0 Consolidation Worksheet Description Debit Credit [C] 0 0 Dividends 0 0 > 0 0 [E] 0 0 Common stock APIC 0 0 . 0 0 0 0 [A] PPE net 0 0 Customer list 0 0 Royalty agreement 0 0 0 0 0 0 [D] 0 0 PPE net 0 0 Customer list 0 0 0 0 IN [lcogs] 0 0 0 0 [lsales] 0 . . 0 0 0 [lcogs] 0 0 . 0 0 [lpay] 0 OO 0 Parent Sub Dr Cr Consolidated Income statement: 0 $ 0 Sales Cost of goods sold $5,160,000 $939,600 [lsales] (3,600,000) (564,000) [lcogs] O 0 0 [lcogs] 0 [lsales] $ 0 0 0 1,560,000 375,600 80,400 (996,000) (243,600) 5644,400 $132,000 [C] [D] 0 0 $ 0 Gross profit Income (loss) from subsidiary Operating expenses Net income Statement of retained earnings: BOY retained earnings Net income Dividends EOY retained earnings Balance sheet: Assets [E] 0 $ 0 $2,619,600 644,400 (144,000) $3,120,000 $486,000 132,000 (18,000) $600,000 o lo 0 [C] 0 $ Cash $ Accounts receivable $756,000 $300,000 672,000 228,000 1,020,000 276,000 4,800,000 516,000 0 Inventory PPE, net Customer List Royalty agreement Goodwill Equity investment [A] [A] [A] [A] [lcogs] 0 [lpay] 0 [lcogs] 0 [D] 0 [D] 0 [D] O O O O O OOO O O O o 1,152,000 0 O O [C] [E] [A] $8,400,000 $1,320,000 $ 0 $ Liabilities and stockholders' equity Accounts payable Other current liabilities Long-term liabilities Common stock APIC Retained earnings $360,000 $110,400 [lpay] 480,000 152,400 3,000,000 313,200 816,000 60,000 624,000 84,000 [E] 3,120,000 600,000 $8,400,000 $1,320,000 O O O O O [E] 0 0 0 $ 0 $ 0 $ 0