Exercise 4 (LO 2) Equity method, second year, eliminations, income statement. The trial balances of Parker and Sargent companies of Exercise 3 for December 31, 2016, are pre- sented as follows: Parker Sargent 115,000 200,000 (40,000) Current Assets ......... Depreciable Fixed Assets ....... Accumulated Depreciation Investment in Sargent Company .. Current Liabilities Common Stock ($10 par) 102,000 400,000 (130,000) 320,000 (80,000) (300,000) (100,000) (continued) Parker Sargent Retained Earnings, January 1, 2016.. Sales Expenses ............................ Subsidiary Income.......... Dividends Declared......... Totals ...................... (260,000) (200,000) 160,000 (12,000) (170,000) (100,000) 85,000 10,000 0 Parker Company continues to use the simple equity method. 1. Prepare all the eliminations and adjustments that would be made on the 2016 consolidated worksheet. 2. Prepare the 2016 consolidated income statement and its related income distribution schedules. Exercise 4 (LO 2) Equity method, second year, eliminations, income statement. The trial balances of Parker and Sargent companies of Exercise 3 for December 31, 2016, are pre- sented as follows: Parker Sargent 115,000 200,000 (40,000) Current Assets ......... Depreciable Fixed Assets ....... Accumulated Depreciation Investment in Sargent Company .. Current Liabilities Common Stock ($10 par) 102,000 400,000 (130,000) 320,000 (80,000) (300,000) (100,000) (continued) Parker Sargent Retained Earnings, January 1, 2016.. Sales Expenses ............................ Subsidiary Income.......... Dividends Declared......... Totals ...................... (260,000) (200,000) 160,000 (12,000) (170,000) (100,000) 85,000 10,000 0 Parker Company continues to use the simple equity method. 1. Prepare all the eliminations and adjustments that would be made on the 2016 consolidated worksheet. 2. Prepare the 2016 consolidated income statement and its related income distribution schedules