Question 32 15 pts On January 1, 2016, Parent Company purchased 80% of the common stock of Subsidiary Company for $316,000. On this date, Subsidiary had common stock, other paid-in capital, and retained earnings of $40,000, $120,000, and S190,000, respectively. Net income and dividends for 2 years for Subsidiary Company were as follows: 20X1 20X2 Net income $50,000 $90,000 Dividends 10,000 20,000 On January 1, 2016, the only tangible assets of Subsidiary that were undervalued were inventory and building. Inventory, for which FIFO is used, was worth $5,000 more than cost. The inventory was sold in 2016. Building, which was worth $15,000 more than book value, has a remaining life of 8 years, and straight-line depreciation is used. Any remaining excess is goodwill. Prepare Parent's 2016 and 2017 journal entries (after the purchase has been recorded) to record the transactions related to its investment in Subsidiary under the a cost method b. simple equity method