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In: AccountingParent owns 100% of subsidiary.The two corporations have the following balance sheet. AssetsParent...Parent owns 100% of subsidiary.The two corporations have the following balance sheet. AssetsParentSubsidiaryGeneral assets1,500,000750,000Investment in Subsidiary200,000Note receivable from Subsidiary1,000,000 Total2,700,000750,000 Liabilities and EquityGeneral liabilities1,500,000150,000Note payable to parent1,000,000Common Stock300,000200,000Retained Earnings (deficit)900,000-600,000 Total2,700,000750,000Parent’s basis in Subsidiary stock is $200,000. The corporationsdo not file a consolidated tax return.Prior to liquidation, Subsidiary uses $150,000 to pay off thegeneral liabilities.Subsidiary transfers all of its assets to Parent in a completeliquidation.What are the consequence to Subsidiary and Parent?