help me solve this Exercise SA$1-3$ Equity income with intercompany profits. Spancrete Corporation

acquires a $30\%$ interest in the outstanding stock of Werl Corporation on January $1,2015.$ At that time, the following determination and distribution of excess schedule is prepared:

During $2015,$ Spancrete purchases $$200,000$ of goods from Werl. $$20,000$ of these purchases

are in the December $31,2015,$ ending inventory. During $2016,$ Spancrete purchases $$250,000$ of goods from Werl. $$30,000$ of these purchases are in the December $31,2016,$ ending inventory.

Werl's gross profit rate is $30\%.$ Also, Spancrete purchases a machine from Werl for $$15,000$ on

January $1,2016.$ The machine has a book value of $$10,000$ and a $5-$year remaining life. Werl reports net income of $$90,000$ and pays $$20,000$ on dividends during $2016.$

Prepare an income distribution schedule for Werl, and record the entries to adjust the investment in Werl for $2016$ using the equity method.