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Haynes, Inc., obtained 100 percent of Turner Company's common stock on January 1, 2017, by issuing 10,100 shares of $10 par value common stock. Haynes's
Haynes, Inc., obtained 100 percent of Turner Company's common stock on January 1, 2017, by issuing 10,100 shares of $10 par value common stock. Haynes's shares had a $15 per share fair value. On that date, Turner reported a net book value of $108,900. However, its equipment (with a five-year remaining life) was undervalued by $5,600 in the company's accounting records. Also, Turner had developed a customer list with an assessed value of $37,000, although no value had been recorded on Turner's books. The customer list had an estimated remaining useful life of 10 vears The following balances come from the individual accounting records of these two companies as of December 31, 2017 Haynes Turner $ (629,000) $(338,000) 182,000 Revenues Expenses Investment income Dividends declared 454,000 Not given 90,000 70,000 The following balances come from the individual accounting records of these two companies as of December 31, 2018 Haynes Turner Revenues Expenses Investment income Dividends declared Equipment $ (821,000) $(407,000) 221,800 479,400 Not given 100,000 523,000 60,000 338,000 a. What balance does Haynes's Investment in Turner account show on December 31, 2018, when the equity method is applied? b. What is the consolidated net income for the year ending December 31, 2018? C-1. What is the consolidated equipment balance as of December 31, 2018? c-2. Would this answer be affected by the investment method applied by the parent? d. Prepare entry "C for the beginning of the Retained Earnings account on a December 31, 2018 by using initial value, partial equity and equity method
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