Project and point allocation is as follows: $1.$ Prepare allocation schedule as we have gone over in class. $2.$ Prepare the CONSOLIDATING $/$ ELIMINATING journal entries for December $31,2022.3.$ Complete the consolidation workpaper, in it's entirety, including income statement, statement of a retained earnings and balance sheet. Worth $40$ points. $4.$ Complete formal consolidated financial statements including income statement, statement of a retained earnings and balance sheet. You can omit the statement of cash flows. Worth $15$ points. The template for the workpaper can be found here: HH$5$E $-$ CH$5-$ P$66$ TEMPLATE.xlsx Comprehensive consolidation subsequent to date of acquisition$$Equity method, noncontrolling interest, AAP computation, goodwill, upstream and downstream intercompany inventory profits, downstream intercompany depreciable asset gain A parent company acquired $80\%$ of the stock of a subsidiary company on January $1,2018,$ for $$250,380.$ On this date, the balances of the subsidiary$$s stockholders$$ equity accounts were Common Stock, $$156,000,$ and Retained Earnings, $$31,200.$ On January $1,2018,$ the market value for the $20\%$ of shares not purchased by the parent was $$61,620.$ On January $1,2018,$ the subsidiary$$s recorded book values were equal to fair values for all items except four: $(1)$ accounts receivable had a book value of $$39,000$ and a fair value of $$33,800,(2)$ buildings and equipment, net had a book value of $$65,000$ and a fair value of $$88,400,(3)$ the licenses intangible asset had a book value of $$45,500$ and a fair value of $$100,100,$ and $(4)$ notes payable had a book value of $$26,000$ and a fair value of $$18,200.$ Both companies use the FIFO inventory method and sell all of their inventories at least once per year. The net balance of accounts receivables are collected in the following year. On the acquisition date, the subsidiary$$s buildings and equipment, net had a remaining useful life of $6$ years, licenses had a remaining useful life of $7$ years, and notes payable had a remaining term of $4$ years. On January $1,2021,$ the parent sold a building to the subsidiary for $$104,000.$ On this date, the building was carried on the parent$$s books $($net of accumulated depreciation$)$ at $$84,500.$ Both compa$-$ nies estimated that the building has a remaining life of $6$ years on the intercompany sale date, with no salvage value. Each company routinely sells merchandise to the other company, with a profit margin of $25$ percent of selling price $($regardless of the direction of the sale$).$ During $2022,$ intercompany sales amount to $$19,500,$ of which $$10,400$ of merchandise remains in the ending inventory of the parent. On December $31,2022,$ $$5,200$ of these intercompany sales remained unpaid. Additionally, the subsidiary$$s December $31,2021$ inventory includes $$15,600$ of merchandise purchased in the preceding year from the parent. During $2021,$ intercompany sales amount to $$26,000,$ and on December $31,2021,$ $$7,800$ of these inter$-$ company sales remained unpaid. The parent accounts for its Equity Investment in the subsidiary using the equity method. Uncon$-$ firmed profits are allocated pro$-$rata. The pre$-$consolidation financial statements for the two companies for the year ended December $31,2022,$ are provided below: Parent Subsidiary Parent Subsidiary Income statement: Balance sheet: Cash $...........................$ $ $58,500$ $ $32,500$ Accounts receivable $...............70,20062,400$ Inventories $......................169,00059,800$ Buildings and equipment, net $........163,800117,000$ Other assets $.....................74,100130,000$ Licenses $........................013,000$ Investment in subsidiary $............302,9000$ Total assets $.....................$ $$838,500$ $$414,700$ Accounts payable $.................$ $ $45,500$ $ $19,500$ Notes payable $....................65,00028,600$ Other liabilities $...................28,60033,800$ Common stock $...................325,000156,000$ Retained earnings $................374,400176,800$ Total liabilities and equity $.........$ $$838,500$ $$414,700$ Sales. $.........................$ $$650,000$ $$260,000$ Cost of goods sold $...............(338,000)(166,400)$ Gross profit $.....................312,00093,600$ Depreciation & amort. expense $.....(15,600)(13,000)$ Operating expenses $..............(201,500)(49,400)$ Interest expense $.................(7,800)(2,600)$ Total expenses $............(224,900)(65,000)$ Income $($loss$)$ from subsidiary $......18,5900$ Net income $......$ $$105,690$ $ $28,600$ Statement of retained earnings: Beginning retained earnings. $.$$$346,710$ $$167,700$ Net $$105,690$ $ $28,600$ Statement of retained earnings: Beginning retained earnings. $..$ $$346,710$ $$167$