On January 1, 2011, Queen Company exchanged $125,000 cash for 80 percent of the outstanding
voting stock of Bishop Company. The consideration transferres by Queen provided a
reasonable basis for assessing the total January 1, 2011, fair value of Bishop Company.
At the acquisition date, Bishop reported the following owner's equity amounts in its balance sheet.
Common stock	$ 45,000
Additional paid in capital	10,000
Retained earnings	75,000
In determining its acquisition offer, Queen noted that the values for Bishop's recorded assets and
liabilities approximated their fair values, with the fo;;owing exceptions:
Land understated by $10,000
Equipment overstated by $5,000	5-year remaining life
Building understated $8,000	10-year remaining life
Balance attributed to Goodwill.
The next two years Bishop reported the following figures:
Year	Net Income	Divvidends
2011	$ 25,000	$ 8,000
2012	32,000	10,000
At December 31, 2012, the two companies report the following balances:
	Queen	Bishop
Income Statement
Revenues	(450,000)	(245,000)
Cost of goods sold	295,000	168,000
Depreciation expense	40,000	30,000
Amortization expense	15,000
Interest expense	8,000	15,000
Equity income	(25,760)
Net income	(117,760)	(32,000)
Noncontrolling interest income
Net income to controlling interest
Statement of Retained Earnings
Retained earnings 1/1/12	(259,000)	(92,000)
Net income	(117,760)	(32,000)
Dividends paid	60,000	10,000
Retained earnings 12/31/12	(316,760)	(114,000)
Balance Sheet
Current assets	40,000	24,000
Land	43,500	34,000
Equipment	205,000	167,000
Building	264,000	82,200
Investment in Bishop	156,520
Goodwill
Total Assets	709,020	307,200
Current liabilities	(35,000)	(29,400)
Long term liabilities	(110,260)	(108,800)
Common stock	(112,000)	(45,000)
APIC	(135,000)	(10,000)
Retained earnings	(316,760)	(114,000)
Noncontrolling interest in Bishop
Noncontrolling interest in Bishop
	(709,020)	(307,200)
Using the acquisition method, complete the worksheet and make the appropriate journal entries
for 2012.