Buster Products Corporation acquired 90 percent ownership of Sanford Company on October 20, \(20 \mathrm{X} 2\), through an exchange of voting shares in a transaction qualifying as a pooling of interests. Buster Products issued 8.000 shares of its \(\$ 10\) par stock to acquire 27.000 shares of Sanford Company \(\$ 5\) par stock. Trial balances of the two companies on December 31, 20X2, are as follows:

In 20X2, Sanford Company reported net income of \(\$ 45,000\) before its acquisition by Buster Products and \(\$ 15,000\) after acquisition. Sanford Company paid dividends of \(\$ 20,000\) in April and \(\$ 10,000\) in November of 20X2. Buster Products Corporation paid dividends of \(\$ 40,000\) in 20X2. Buster Products uses the equity method in accounting for its investment in Sanford.
\section*{Required}

a. Give all journal entries recorded by Buster Products Corporation during 20X2 that relate to its investment in Sanford Company.

b. Give the workpaper elimination entries needed on December \(31,20 \times 2\), to prepare consolidated financial statements.

c. Prepare a three-part consolidation workpaper as of December 31, \(20 \mathrm{X} 2\).

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Buster Products Corporation Sanford Company Debit Credit Item Debit Cash $ 85,000 Accounts Receivable 100,000 Credit $ 50,000 60.000 Inventory 150.000 100.000 Buildings and Equipment 400,000 340.000 Investment in Sanford Stock 252.000 Cost of Goods Sold 305.000 145.000 Depreciation Expense 25,000 20,000 Other Expenses 14,000 25.000 Dividends Declared 58.000 30.000 Accumulated Depreciation Accounts Payable $ 105,000 40,000 $ 65,000 50,000 Taxes Payable 70.000 55.000 Bonds Payable 250.000 100,000 Sales Common Stock Additional Paid-In Capital Retained Earnings Income from Subsidiary 200.000 150.000 55.000 225.000 100.000 390.000 250.000 54,000 Totals $1.389.000 $1.389.000 $770,000 $770.000