Prepare consolidation spreadsheet for continuous sale of inventory$-$Equity method

Assume a parent company acquired $100\%$ of a subsidiary on January $1,2015.$ The purchase price was

$$560,000$ in excess of the subsidiary's book value of Stockholders' Equity on the acquisition date, and

$$420,000$ of that excess was assigned to an unrecorded Patent owned by the subsidiary. On January $1,$

$2015,$ the Patent has a $10-$year estimated remaining useful life. The remaining $$140,000$ was assigned to

Goodwill

Assume the wholly owned subsidiary sells inventory to the parent. The parent, 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:

a$.$ Show the computation to yield the pre$-$consolidation $$79,800$ Income $($loss$)$ from subsidiary

reported by the parent for the year ended December $31,2019.$

b$.$ Show the computation to yield the $$1,111,600$ pre$-$consolidation Equity Investment account

balance reported by the parent at December $31,2019.$

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

d$.$ Prepare the consolidation spreadsheet for the year ended December $31,2019.$