QUESTION 7 Assume an investee has the following financial statement information for the three years ending December 31, 2019: At December 31 2019 2018 2017 Current Assets. .$285,000. $277,500.. $207,500 Tangible Fixed Assets ..$662,500..... $575,000. $563,000 Intangible Assets $40,000 $45,000 $50,000 Total Assets. ..$987,500. $897,500... $820,000 Current Liabilities.. $120,000............... $110,000........... .$100,000 Non-Current Liabilities.... .......$267,500.......... ..$242,500... $220,000 Common Stock. $100,000. .$100,000. .$100,000 Additional Paid-in-Capital. $100,000. .$100,000. $100,000 Retained Earnings. $400,000 $345,000 $300,000 Total Shareholders' Equity..... $600,000.. ..$545,000. .$500,000 Total Liabilities and Equity...... .$987,500. $897,500 .$820,000 For the years ended December 31: Revenues. $970,000. $920,000 .$850,000 Expenses. $875,000 $840,000. $775,000 Net Income. $95,000. ..$80,000. .$75,000 Dividends. ..$40,000.. .$35,000. $25,000 Assume on January 1, 2017, an investor company purchases 100% of the outstanding voting common stock of the investee. On the date of the acquisition, the investee's identifiable net assets had fair values that approximated their historical book values except for tangible fixed assets which had fair value that was $112,500 higher than the investee's recorded book value. The tangible fixed assets had a remaining useful life of 6 years. In addition, the acquisition resulted in goodwill in the amount of $218,750 recognized in the consolidated financial statements of the investor company. On January 1, 2017, the investee's retained earnings balance was $250,000. Assuming that the investor company uses the COST method to account for its investment in the investee, what is the amount of the (ADJ) entry (ENTRY TO BRING THE BOY INVESTMENT TO AN AS IF EQUITY BALANCE) necessary to prepare the consolidated financial statements for the year ended December 31, 2019? O a. $150,000 O b. $57,500 O C. $95,000 O d. $93,750