Alpha Corporation purchased 60 % of Beta Company on January 1, 2015, for $82,800. On that date, the non-controlling interest had a fair value of $55,200 and Beta reported common of $10,000 and retained earnings of $20,000. The differential is partially comprised of $10,000 related to land. During 2015 Beta had income of $40,000 and paid dividends of $10,000/ Alpha uses the equity method in accounting for its ownership of Beta. On December 31, 2016 the trail balances of the companies are as follows.

Income statement Alpha Corp. Beta Company

Sales 200,000 120,000

Cost of Goods sold -99,800 -61,000

Depreciation expense -25,000 -17,400

Interest expense -6,0000 -14,000

Income from subsidiary 16,680

Consolidation net income 85,880 27,600

Statement of retained earnings

Beginnings balance 228,560 50,000

Net income 85,880 27,600

Less Dividends declared -40,000 -10,000

Ending balance 274,440 67,600

Balance sheet

Cash & Accounts receivable 81,400 39,200

Inventory 60,000 55,000

Investments in Beta 107,040

Land 40,000 30,000

Buildings & equipment 504,000 362,000

Accumulated depreciation -168,000 -77,400

Total assets 624,440 408,800

Accounts payable 68,800 41,200

Bonds payable 80,000 200,000

Bond premium 1,200

Common Stock 200,000 100,000

Retained earnings 274,440 67,600

Total liabilities & equity 624,440 408,800

Beta sold inventory costing $25,500 to Alpha for $42,500 in 2015. Alpha held $8,500 in inventory at the end of 2015. Beta sold inventory costing $21,000 to Alpha in 2016 for $35,000 Alpha held $10,500 in inventory at the end of 2016.

On 1/1/2015 Alpha sold equipment with a book value of $9,000 to Beta for $12,000. The equipment originally cost Alpha $16,000. The equipment has a remaining life of 5 years at 1/1/2015.

1. Prepare an allocation of acquisition value at the time of acquisition to determine any excess value.
2. Record the equity entries made by Alpha for 2016.
3. Prepare the analysis and entries required for the worksheet in 2016.