Prepare consolidation spreadsheet for intercompany sale of land - Equity Method

Assume a parent company acquired its subsidiary on January 1, 2017, at a purchase price that was $270,000 in excess of the book value of the subsidiary's Stockholders' Equity on the acquisition date. Of that excess, $180,000 was assigned to an unrecorded patent owned by the subsidiary that is being amortized over a 10 year period. The [A] Patent asset has been amortized as part of the parent's equity method accounting. The remaining $90,000 was assigned to Goodwill. In 2018, the wholly owned subsidiary sold Land to the parent for $108,000. The land was reported on the subsidiary's balance sheet for $72,000 on the date of sale. The parent uses the equity method to account for its Equity Investment. Following are financial statements of the parent and its subsidiary for the year ended December 31, 2019:

	PARENT	SUBSIDIARY
Income statement:
Sales	$2,700,000	$342,000
COGS	(1,890,000)	(198,000)
Gross Profit	810,000	144,000
Income (loss) from subsidiary	45,000	0
Operating Expenses	(513,000)	(81,000)
Net Income	$342,000	$63,000

	PARENT	SUBSIDIARY
Statement of retained earnings
Beginning retained earnings	$648,000	$177,300
Net Income	342,000	63,000
Dividends	(90,000)	(15,300)
Ending retained earnings	$900,000	$225,000

	PARENT	SUBSIDIARY
Balance sheet
Assets
Cash	$234,000	$108,000
A/R	342,000	72,000
Inventory	522,000	135,000
PPE, net	1,800,000	193,500
Equity Investment	477,000	0
	$3,375,000	$508,500
Liabilities and stockholders equity
A/P	$201,600	$45,000
Other current liabilities	248,400	54,000
Long term liabilities	1,350,000	112,500
Common stock	360,000	27,000
APIC	315,000	45,000
Retained earnings	900,000	225,000
	$3,375,000	$508,000

a. Show the computation to yield the $45,000 of Income (loss) from subsidiary reported by the parent for the year ended December 31, 2019.

b. Show the computation to yield the $477,000 Equity Investment account balance reported by the parent on 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.