A 90% interest in Saxton Corporation was purchased by Palm Incorporated on January 2, 2014. The common stock balance of Saxton Corporation was $2,992,700 on this date, and the balance in retained earnings was $988,700. The cost of the investment to Palm Incorporated was $3,793,100. The balance sheet information available for Saxton Corporation on the acquisition date revealed these values:

		Book Value		Fair Value
Inventory (FIFO)		$695,700		$792,000
Equipment (net)		1,973,000		1,973,000
Land		1,631,100		2,039,900

The equipment was determined to have a 15-year useful life when purchased at the beginning of 2009. Saxton Corporation reported net income in 2014 of $249,000 and $297,000 in 2015. No dividends were declared in either of those years.

a. Prepare the worksheet entries, assuming that the complete equity method is used to account for the investment, to eliminate the investment account, and to allocate and depreciate the difference between book value and the value implied by the purchase price in the 2015 consolidated statements workpaper.

Account Titles and Explanation	Debit	Credit
(To eliminate subsidiary income)
(To eliminate the investment amount and create noncontrolling interest account)
(To allocate and depreciate the difference between implied and book value)