15Piper Company purchased Snead Company common stock through open-market purchases as follows:

Acquired

Date Shares Cost

1/1/091,500$ 50,000

1/1/103,300$ 90,000

1/1/116,600$250,000

Snead Company had 12,000 shares of $20 par value common stock outstanding during the entire period. Snead had the following retained earnings balances on the relevant dates:

January 1, 2009$ 90,000

January 1, 201030,000

January 1, 2011150,000

December 31, 2011300,000

Snead Company declared no dividends in 2009 or 2010 but did declare $60,000 of dividends in 2011. Any difference between cost and book value is assigned to subsidiary land. Piper uses the equity method to account for its investment in Snead.

Required:

A.Prepare the journal entries Piper Company will make during 2010 and 2011 to account for its investment in Snead Company.

B.Prepare workpaper eliminating entries necessary to prepare a consolidated statements workpaper on December 31, 2011.