Please don`t just answer it. Show your work with the full breakdown/ Explanation on how you got the answer to these entries especially in part C. I`m using this problem to study for an exam. I need to know how each entry it recorded.

Parent purchased Subsidiary on January 1, 2011. The excess of investment cost over book value of $210,000 was allocated entirely to a 10-year royalty agreement.

Subsidiary regularly sells merchandise to Parent. In 2012, inter-company sales amounted to $123,960, with $27,558 of deferred profit remaining in ending inventory. Year-end inter-company receivables/payables amounted to $40,300.

In 2013, inter-company sales amounted to $123,960 with $35,330 of deferred profit remaining in ending inventory. Year-end inter-company receivables/payables amounted to $49,584.

Financial statements of Parent and Subsidiary for the year ended December 31, 2013 are presented below.

	Parent	Subsidiary
Sales Revenue	$ 9,864,000	$1,859,400
Cost of Goods Sold	(6,904,800)	1,115,640
Gross Profit	2,959,200	743,760
Operating Expenses	(1,874,160)	(483,444)
Equity Income	231,544	_
Net Income	$ 1,316,584	$ 260,316
Retained Earnings, 1/1/13	$ 4,955,674	$ 960,690
Net income	1,316,584	260,316
Dividends	(301,758)	(33,841)
Retained Earnings, 12/31/13	$ 5,970,500	$1,187,165
Cash and receivables	$ 2,557,242	$1,032,395
Inventory	1,913,616	554,101
Equity Investment	1,577,748
Property, Plant & Equipment (Net)	9,205,085	1,025,150
Total Assets	$15,253,691	$2,611,646
Accounts payable	$ 738,825	$ 221,938
Accrued liabilities	910,170	303,830
Notes payable	4,200,000	619,800
Common stock	1,612,764	62,640
Additional paid-in capital	1,821,432	216,273
Retained Earnings, 12/31/13	5,970,500	1,187,165
Total Liabilities and Equities	$15,253,691	$2,611,646

Required:

a. Prepare a schedule showing the computation of Equity Income on Parent's books for 2013.

b. Prepare a schedule showing the computation of Equity Investment on Parent's books at December 31, 2013.

c. Prepare the consolidation entries (entries only no need for worksheet, but if you prefer you can do worksheet as well) for 2013.