Step Acquisition: Significant Influence; 75% Ownership Obtained; Mid-Year Acquisition — Postac¬

quisition Period On 1/1/06, Plazco Inc. acquired 30% of Slazco Inc.’s outstanding common stock at a cost of $380,000. At that time, Slazco’s capital accounts were as follows:

Common stock . $ 600,000 Retained earnings . 400,000

$1,000,000 On 4/1/06, Plazco acquired 45% of Slazco’s outstanding common stock at a cost of $501,000. Earnings and dividend information for Slazco for 2006 are as follows:

First Remaining Full Quarter Quarters Year Net income . $70,000 $240,000 $310,000 Dividends declared . 50,000 140,000 190,000 Assume also that none of Slazco’s assets or liabilities is over- or undervalued at either block acqui¬ sition date.

1. Analyze the Investment account through the date control was achieved (4/1/06). Include the noncontrolling interest.

2. Prepare all consolidation entries at 4/1/06.

3. Update the Investment account analysis through 12/31/06.

4. Prepare all consolidation entries at 12/31/06.

5. If Plazco chose to consolidate Slazco’s income statement for all of 2006 — instead of only the nine-month period from 4/1/06 through 12/31/06 — what two acceptable manners of presenta¬ tion could it use?