Prepare consolidation spreadsheet for intercompany sale of equipment-Cost method Assume a parent company acquired a subsidiary on January 1, 2015 for $576,000. The purchase price was $207,000 in excess of the book value of the sub acquisition date. On the acquisition date, the subsidiary's stockholders equity was comprised of $270,000 of nopar common stock and $99,000 of retained Premium (AAP) was assigned as follows: an increase of $9,000 in accounts receivable that were entirely collected during the year after acquisition, an incre equipment that has 10 years of remaining useful life, $72,000 for an unrecorded patent with an 8-year remaining life and $81,000 for goodwill. All amortiz using the straight-line method. On January 1, 2017, the parent sold Equipment to the subsidiary for a cash price of $89,100. The parent had acquired the equipment at a cost of $84,600 a year useful life using the straight-line method (no salvage value). The parent had depreciated the equipment for 2 years at the time of sale. The subsidiary parent and depreciates the equipment over its remaining 10-year useful life Following are financial statements of the parent and its subsidiary as of December 31, 2019. The parent uses the cost method of pre-consolidation invest Parent Subsidiary Parent Subsidiary Income statement Balance sheet Sales $900,000 $414,000 Assets Cost of goods sold (495,000) (252,000) Cash $81,000 $54,000 Gross profit 405,000 162,000 Accounts receivable 108,000 81,000 Deprec. & amort. Expense (27,000) (18,000) Inventory 252,000 126,000 Operating expenses (270,000) (72,000) Equity investment 576,000 Interest expense (13,500) Total expenses (310,500) (4,500) Property, plant & equipment (94,500) Other assets 306,000 216,000 117,000 198,000 Income (loss) from subsidiary 31,500 Total assets $1,440,000 $675,000 Net income $126,000 $67,500 Liabilities and stockholders' equity Accounts payable $225,000 $48,600 Statement of retained earnings Accrued liabilities 22,500 41,400 BOY retained earnings $495,000 $225,000 Notes payable 135,000 54,000 Net income 126,000 67,500 Common stock 540,000 270,000 Dividends (103,500) (31,500) Retained earnings 517,500 261,000 Ending retained earnings $517,500 $261,000 Total liabilities and equity $1,440,000 $675,000