ON JANUARY 1, 2016 FLORIDA PURCHASED ALL THE OUTSTANDING COMMON SHARES OF SUNSHINE CO FOR $3,500,000 CASH.AT THE DATE OF ACQUISITION, SUNSHINE EQUITY ACCOUNTS HAD THE FOLLOWING BALANCES:

COMMON STOCK$500,000

PAID IN CAPITAL$1,800,000

RETAINED EARNINGS$700,000

ALL OF SUNSHINE'S ASSETS WERE FAIRLY STATED EXCEPT FOR THE FOLLOWING:

EQUIPMENT: BOOK VALUE $180,000, FAIR VALUE $270,000, EST LIFE 5 YEARS

BUILDING: BOOK VALUE $600,000, FAIR VALUE $800,000, EST LIFE 10 YEARS

SUNSHINE ALSO HAD A COPYRIGHT WITH A FAIR VALUE OF $160,000 WITH A REMAINING OF 5 YEARS

DURING 2016, SUNSHINE REPORTED NET INCOME OF $1,325,000 AND PAID DIVIDENDS OF $850,000

DURING 2017, SUNSHINE REPORTED NET INCOME OF $900,000 AND PAID DIVIDENDS OF $1,100,000

REQUIRED:

A.) ANALYZE THE PURCHASE PRICE AND PREPARE THE SCHEDULE ALLOCATING THE PURCHASE PRICE

B.)ASSUME THAT OHIO USES THE EQUITY METHOD TO ACCOUNT FOR ITS INVESTMENT IN BUCKEYE.PREPARE THE JOURNAL ENTRIES TO BE MADE ON ITS BOOKS FOR 2016 AND 2017.EXPLAIN WHY THE ENTRIES ARE MADE.

C.) PREPARE THE CONSOLIDATION WORKSHEET ENTRIES FOR THE YEAR ENDED 2016 AND 2017.EXPLAIN WHY THE ENTRIES ARE MADE.