Parry Corporation acquired a 100% interest in Sent Company on January 1, 2009, paying $140,000. Financial statement data for the two companies for the year ended December 31, 2009 follow:

Required:
A. What method is being used by Parry to account for its investment in Sent Company? How can you tell?
B. Prepare a workpaper for the preparation of consolidated financial statements on December 31, 2009. Any difference between the book value of equity acquired and the value implied by the purchase price relates to subsidiaryland.

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Income Statement Parry Sent $476,000 285,600 45,500 3,500 $154,500 Sales Cost of goods sold Other expense Dividend income 121,000 29,500 Retained Earnings Statement Balance, 1/1 Net income Dividends declared Balance Sheet 76,000 148,400 17,500 19,500 4,000 3,500 Cash Accounts receivable Inventory Investment in Sent Company 14 84,400 76,000 49,500 ,000 4,000 27,000 120,000 206,900 29,000 56,500 36,500 Land 12,000 14,000 100,000 20,000 Accounts payable Common stock Retained earnings