Equity method and consolidation elimination entries. Clinton Corporation ac- quired control of Dole Computer Company on January 2 by purchasing 100 percent of its outstanding stock for $500 million. Clinton attributes the entire excess of cost over book value acquired to goodwill, which it amortizes over 10 years. The shareholders"

equity accounts of Dole Computer Company appeared as follows on January 2 and December 31 of the current year (amounts in millions):

Dole Computer had earnings of $100 million and declared dividends of $30 million during the year. The accounts receivable of Clinton Corporation at December 31 included $3 million due from Dole Computer. Clinton Corporation accounts for its investment in Dole Computer on its single-company books using the equity method.

a. Give the journal entries to record the acquisition of the shares of Dole Computer and to apply the equity method during the year on the books of Clinton Corporation.

b. (Requires coverage of Appendix 11.1.) Give the required elimination entries for a consolidation work sheet at the end of the year, assuming that the work sheet uses preclosing trial balance data.

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Common Stock Retained Earnings Jan. 2 Dec. 31 $300 $300 120 190