Multiple Stock PurchasesJournal Entries

Peck Company purchased Sanno Company common stock in a series of open-market cashpurchases from 2009 through 2011 as follows:

Date: Shares Acquired: Cost

Jan 1 , 2009 1800 46,000

Jan 1, 2010 4500 95,000

Jan 1 , 2011 9900 262,350

Sanno Company had 18,000 shares of 20 par value common stock outstanding during the entire period. Retained earnings balances for Sanno Company on relevant dates were

Jan 1 2009 $20,000

Jan 1, 2010 (30,000)

Jan 1, 2011 85,000

Dec 31, 2011 170,000

Dividends in the amount of $50,000 were distributed by Sanno Company only in 2011. Any difference between implied and book values assigned to good will. Peck company uses the cost method to account for its investment in Sanno Company,

Required:

A. Prepare journal entries that Peck company would record on its books during 2011 to account for its investment in Sanno Company.

B. Prepare the workpaper elimiating entries necessary to prepare a consildatted statement workpaper on Dec 31, 2011