6-5 Parch Corporation acquired 82% of Steppe Company's outstanding common stock for $328,000 cash on March 31. Year 8. Out-of-pocket costs of the business combination may be ignored. Steppe's stockholders' equity accounts on March 31, Year 8, were as follows: Common stock. $2 par Paid-in capital in excess of par Retained earnings Total stockholders' equity $ 50,000 75,000 135.000 $260.000 All of Steppe's identifiable net assets were fairly valued at their March 31, Year 8. carrying amounts except for the following: Carrying amounts Current fair values Land $100.000 $120.000 Building (net) (10-year economic life) 200,000 250,000 Patent (net) (8-year economic life) 60,000 80,000 Any goodwill resulting from the business combination is ver the 10 years. Steppe uses the straight-line method for deprecia- tion and amortization. Steppe includes depreciation expense and amortization expense in operating expenses. During the year ended March 31, Year 9. Steppe reported net income of $1.20 a share and declared and paid no dividends. There were no intercompany trans- actions between Parch and Steppe. Instructions a Prepare Parch Corporation's journal entries to record Steppe Company's operating results for the fiscal year ended March 31. Year 9, under the equity method of accounting. Disregard income taxes. b Prepare the working paper eliminations for Parch Corporation and subsidiary on March 31. Year 9. Disregard income taxes. 5