Journal entries under various methods of accounting for investments. Mulherin Corporation made three long-term investments on January 2. Data relating to these investments appear below.

Assume that these were the only intercorporate investments of Mulherin Corporation. Maloney Company has a patent developed from its internal research efforts that has a market value of \(\$ 80,000\) and a book value of zero on January 2. The patent has a 10 -year remaining life on this date. Any excess purchase price from the acquisition of Quinn Company relates to goodwill. The firm neither amortizes any goodwill nor finds it impaired.

a. Give the journal entries on Mulherin Corporation's books to record these acquisitions of common stock and to account for the intercorporate investments under GAAP. Mulherin Corporation accounts for its investment in Quinn Corporation using the equity method on its separate-company books.

b. (Requires coverage of Appendix 11.1.) Give the work-sheet entry to consolidate Mulherin Corporation and Quinn Corporation. The preclosing trial balance of Quinn Corporation shows the following:

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Book Value and Market Value Percentage Company Acquired of Net Assets on January 2 Acquisition Cost Hanson 15% Maloney 30 Quinn. 100 $2,000,000 2,000,000 2,000,000 $ 320,000 680,000 2,800,000 $200,000 $ 40,000 500,000 180,000 600,000 Net Income (Loss) for the Year Dividends Declared during the Year 310,000 Market Value on Shares Held on December 31 $ 305,000 700,000 1,950,000