Blase Company operates on a calendar-year basis, reporting the results of operations quarterly. For the first quarter of \(20 \mathrm{XI}\). Blase reported net income of \(\$ 60,000\) and paid a dividend of \(\$ 10,000\). On April 1. Starstruck Theaters Inc. purchased 85 percent of the common stock of Blase for \(\$ 750.000\); Blase had 100,000 shares of \(\$ 1\) par common stock outstanding, originally issued at \(\$ 6\) per share. Any cost over the book value of the shares acquired by Starstruck Theaters is related to goodwill. On December 31, 20X1, the management of Starstruck Theaters reviewed the amount attributed to goodwill as a result of its purchase of Blase Company common stock and concluded goodwill was not impaired.

Blase's retained earnings statement for the full year \(20 \mathrm{X} 1\) appears as follows:

Starstruck Theaters accounts for its investment in Blase using the equity method.

\section*{Required}
a Present all entries that would have been recorded by Starstruck Theaters in accounting for its investment in Blase during 20X1.
\(b\). Present all eliminating entries needed in a workpaper to prepare a complete set of consolidated financial statements for the year \(20 \mathrm{X} 1\).

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Retained Earnings, January 1, 20X1 Net Income Dividends Retained Earnings. December 31, 20X1 $150,000 175.000 (40,000) $285.000