3. Matthews Co. acquired 80% of the common stocks of Jackson Co. on

January 1, 2014. As of that date, Jackson had the following trial balance:

Debit Credit

Cash and cash equivalents $ 84,000

Accounts receivable (net) 60,000

Inventory 132,000

Supplies 24,000

Land 108,000

Buildings-net (20 years remaining life) 168,000

Equipment-net (8 years remaining life) 288,000

Accounts payable $ 72,000

Long-term liabilities (mature 12/31/2018) 216,000

Common stocks 360,000

Additional paid-in capital 72,000

Retained earnings, 1/1/2014 144,000

Totals $ 864,000 $ 864,000

Matthews Co. acquired 80% of the common stock of Jackson Co. for $672,000 in cash. The fair value of 20% noncontroling interest is $153,600. As of January 1, 2014, Jackson's land had a fair value of $122,400. Its buildings had a fair value of $201,600, and its equipment had a fair value of $259,200. Its long-term liabilities had a fair value of 192,000. Its unrecorded in- process Research and Development was valued at $120,000. All other assets and liabilities had fair values equal to their book values.

Matthews decided to use the initial value method for this investment.

During 2014, Jackson reported net income of $115,000 while paying dividends of 14,000. During 2015, Jackson reported net income of $158,000 while paying dividends of 42,000.

Required: 30min

Prepare consolidation worksheet entries for December 31, 2015.