Apex Corporation acquired 75 percent of the common stock of Beta Company on May 15, 20X3, at underlying book value. The balance sheet of Beta Company on December 31, 20X6, contained the following amounts:

During 20X7. Apex earned operating income of \(\$ 90,000\), and Beta reported net income of \(\$ 45,000\). Neither company declared any dividends during \(20 \times 7\).
Beta Company is considering repurchasing 1,000 of its outstanding shares as treasury stock at a price of \(\$ 68\) each.
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a. Assuming the shares are purchased from Nonaffiliated Company on January 1, 20X7:
(1) Compute the effect on the book value of the shares held by Apex Corporation.
(2) Give the entry on the books of Apex Corporation to record the change in the book value of its investment in Beta's shares.
(3) Prepare the eliminating entries needed on December \(31,20 \times 7\), to complete a consolidation workpaper.

b. Assuming the shares are purchased directly from Apex Corporation on January 1, 20X7:
(1) Compute the effect on the book value of the shares held by Apex Corporation.
(2) Give the entry on the books of Apex Corporation to record its sale of Beta Corporation shares to Beta.
(3) Prepare the eliminating entries needed on December \(31,20 \times 7\), to complete a consolidation workpaper.

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Cash $ 55,000 Accounts Receivable Inventory 125.000 Buildings and Equipment 700.000 Less: Accumulated Depreciation (220,000) 70,000 Accounts Payable Bonds Payable Common Stock ($10 par) Additional Paid-In Capital Retained Earnings $ 30,000 200,000 100.000 -80.000 -320.000 Total Assets $730,000 Total Liabilities and Equities $730,000