On January $1,2023,$ Pinnacle Corporation exchanged $$3,360,500$ cash for $100$ percent of the outstanding voting stock

of Strata Corporation. On the acquisition date, Strata had the following balance sheet:

Pinnacle prepared the following fair$-$value allocation:

At the acquisition date, Strata's buildings had a $10-$year remaining life and its licensing agreements were due to expire in

$5$ years. On December $31,2024,$ Strata's accounts payable included an $$88,400$ current liability owed to Pinnacle.

Strata Corporation continues its separate legal existence as a wholly owned subsidiary of Pinnacle with independent

accounting records. Pinnacle employs the initial value method in its internal accounting for its investment in Strata. Prepare a worksheet to consolidate the financial information for these two companies.

Compute the following amounts that would appear on Pinnacle$$s $2024$ separate $($nonconsolidated$)$ financial records if Pinnacle$$s investment accounting was based on the equity method.

Subsidiary income.

Retained earnings, $1/1/24.$

Investment in Strata.

What effect does the parent$$s internal investment accounting method have on its consolidated financial statements?