26. On January 1, 2001, Hebron, Inc. purchased 75 percent of the outstanding stock of Jasper, Inc. for $1 million. At the date of acquisition Jasper's common stock and retained earnings account balances were $500,000 and $700,000, respectively. The market value of Jasper's net assets were equal to their book values with the exception of equipment which had a market value that was $50,000 greater than its book value. The equipment had a remaining economic value of 5 years. Any remaining differential is attributable to goodwill. During 2001, Jasper reported net income of $300,000, other comprehensive income of $20,000 and paid dividends of $30,000. Required: Prepare all elimination entries needed in a three-part workpaper to prepare the year 2001 consolidated financial statements, assuming that Hebron uses the equity method to account for its investment in Jasper. Solve for total enterprise value algebraically. 217,500 E(1) Income from Subsidiary Dividends Investment in Jasper 22,500 195,000 75,000 E(2) Income to Noncontrolling Interests Dividends Noncontrolling Interests 7,500 67,500 E(3) Common Stock-Jasper, Inc. Retained Earnings-Jasper Differential Investment in Jasper Noncontrolling Interests 500,000 700,000 100,000 1,000,000 300,000 E(4) Equipment Goodwill Differential 37,500 62,500 100,000 E(5) Depreciation Expense Accumulated Depreciation 7,500 7,500 E(6) Other Comprehensive Income-Unrealized Gain in Investments Investment in Jasper 15,000 15,000 E(7) Other Comprehensive Income to Noncontrolling Interests Noncontrolling Interests 5,000 5,000 Also: Equipment Goodwill Noncontrolling interests 12,500 20,833 33,333 Depreciation Expense Accumulated Depreciation 2500 2500 2500 Noncontrolling interests Income to noncontrolling interests 2500