Ennis Corporation acquired 35 percent of the stock of Jackson Corporation on January 1, 20X8. by issuing 25,000 shares of its \(\$ 2\) par value shares. The balance sheet for Jackson Corporation immediately before the acquisition contained the following items:

Shares of Ennis Corporation were selling at \(\$ 8\) at the time of the acquisition. On the date of acquisition, the remaining economic life of buildings and equipment held by Jackson was 20 years. The amount of the differential assigned to goodwill is not amortized. For the year 20X8, Jackson reported net income of \(\$ 70,000\) and paid dividends of \(\$ 10,000\).
\section*{Required}

a. Give the journal entries recorded by Ennis Corporation during \(20 \mathrm{X} 8\) related to its investment in Jackson Company.

b. What balance will Ennis report as its investment in Jackson at December 31, 20X8?

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Assets JACKSON CORPORATION Balance Sheet January 1, 20X8 Book Value Fair Value Cash and Receivables Inventory (FIFO basis) $ 40.000 80,000 Land 50,000 Buildings and Equipment (net) 240.000 $ 40.000 100,000 70.000 320,000 Total Assets $410,000 $530,000 Liabilities and Equities Accounts Payable $ 70.000 $ 70,000 Common Stock 130.000 Retained Earnings 210,000 Total Liabilities and Equities $410,000