LO2 55. Consolidation several years subsequent to date of acquisition-Equity method Assume a parent company acquired a subsidiary on January 1, 2015. The purchase price was $650,000 in excess of the subsidiary's book value of Stockholders' Equity on the acquisition date, and that excess was assigned to the following [A] assets: THAI [A] Asset Original Amount Original Useful Life 8 years Licenses Goodwill $400,000 250,000 $650,000 Indefinite The Licenses have been amortized as part of the parent's pre-consolidation equity method accounting. The Goodwill asset has been tested annually for impairment, and has not been found to be impaired. The financial statements of the parent and its subsidiary for the year ended December 31, 2019, are as follows: Parent Subsidiary Parent Subsidiary $3,100,000 (2,200,000) 900,000 Income statement: Sales..... Cost of goods sold Gross profit. Equity income (loss). Operating expenses. Net income (loss). Balance sheet: Assets Cash $1,200,000 (740,000) 460,000 $ Accounts receivable 20,000 260,000 340,000 (230,000) (500,000) 170,000 (640,000) $ (180,000) Inventory Equity investment. Property, plant and equipment (PPE), net ... $ 700,000 820,000 1,200,000 1,080,000 2,600,000 $6,400,000 680,000 $1,300,000 Statement of retained earnings: Beginning retained earnings... $1,370,000 Net income 170,000 Dividends. (40,000) Ending retained earnings . $1,500,000 $680,000 (180,000) $ 460,000 550,000 $ 100,000 120,000 $ 500,000 Liabilities and stockholders' equity Accounts payable Accrued liabilities Long-term liabilities. Common stock APIC.. Retained earnings 2,000,000 430,000 1,460,000 1,500,000 400,000 80,000 100.000 500,000 $6,400,000 $1,300,000 a. b. C. Compute the Equity Investment balance as of January 1, 2019. Show the computation to yield the $(230,000) Equity Loss reported by the parent for the year ended December 31, 2019. Show the computation to yield the $1,080,000 Equity Investment account balance reported by the parent at December 31, 2019. Prepare the consolidation entries for the year ended December 31, 2019. Prepare the consolidation spreadsheet for the year ended December 31, 2019. d. e