1. Alpha Corporation purchased 70% of Beta Company on January 1, 2015, for $98,000. On that date,the non controlling interest had a fair value of $42,000 and Beta reported common stock outstanding of $100,000 and retained earnings of $20,000. The differential is partially comprised of $5,000 related to excess value of buildings and equipment. These assets have a remaining useful life of five years. During 2015 Beta had income of $40,000 and paid dividends of $10,000. Alpha uses the equity method in accounting for itsownership of Beta. On December 31, 2016 the trial balances of thecompanies are as follows:Income statementAlpha Corporation Beta CompanySales 200,000 120,000Cost of goods sold -99,800 -61,000Depreciation expense -25,000 -17,400Interest expense -6,000 -14,000Income from subsidary 16,620Consolidated net income85,820 27,600Statement of retained earningsBeginning balance 228,560 50,000Net income 85,820 27,600Less dividends declared -40,000 -10,000Ending balance274,380 67,600Balance sheetCash & accounts receivable 81,400 39,200Inventory 60,000 55,000Investment in Beta 124,370Land 40,000 30,000Buildings & equipment 504,000 362,000Accumulated depreciation -168,000 -77,400Total assets 641,770 408,800Accounts payable 86,190 41,200Bonds payable 80,000 200,000Bond premium 1,200Common stock 200,000 100,000Retained earnings 274,380 67,600Total liabilities & equity 641,770 408,800Beta sold inventory costing $45,000 to Alpha for $75,000 in 2015. Alpha held $9,000 in inventoryat the end of 2015. Beta sold inventory costing $77,000 to Alpha in 2016 for $140,000 Alpha held $10,000 in inventory at the end of 2016.On 1/1/2015 Alpha sold equipment with a book value of $10,000 to Beta for $14,000. The equipment orginally cost Alpha $18,000. The equipment has a remaining life of 5 years at 1/1/2015.

1. Prepare an allocation of acquisition value at the time of acquisition to determine any excess value.

2. Record the equity entries made by Alpha for 2015 and 2016.

3. Prepare the analysis and entries required for the worksheet in 2015 and 2016.