Polar acquired Snow on January 1, 2019 at a price $300,000 in excess of book value. Of that excess, $200,000 was allocated to an unrecorded patent with a 10-year life, with the remainder to goodwill. Polar uses the equity method to account for its investment in its subsidiary.

In 2020, Snow sold to Polar land having a book value of $90,000 for a total price of $145,000. Polar still owns the land as of 12/31/21.

Financial statements of the two companies for the year ended December 31, 2021 are presented below.

	Polar	Snow
Sales revenue	$2,500,000	$525,000
Cost of goods sold	(1,750,000)	(345,000)
Gross profit	750,000	180,000
Operating expenses	(475,000)	(102,500)
Income (loss) from Snow	57,500	________
Net Income	$ 332,500	$ 77,500
Retained Earnings, 1/1/21	$ 840,700	$245,650
Net income	332,500	77,500
Dividends	( 52,900)	(8,850)
Retained Earnings, 12/31/21	$1,120,300	$314,300
Cash and receivables	$ 320,100	$178,200
Inventory	461,700	278,600
Equity investment in Snow	625,400
Property, plant & equipment (Net)	1,496,500	321,700
Total Assets	$2,903,700	$778,500
Accounts payable	$ 182,400	$ 55,900
Accrued liabilities	205,300	70,200
Notes payable	810,000	212,000
Common stock	354,200	45,000
Additional paid-in capital	231,500	81,100
Retained Earnings, 12/31/21	1,120,300	314,300
Total Liabilities and Equities	$2,903,700	$778,500

Required:

a. Prepare a schedule showing the computation of Income (loss) from subsidiary on Polar's pre-consolidation books for 2021.

b. Calculate the Equity Investment account on Polar's consolidation balance sheet at December 31, 2020.

c. Prepare the consolidation worksheet entries for 2021 in journal format.