. On January 1, 2017, Maddox Company acquired Smoltz Corporation by issuing 46,000 shares of its $1 par common stock with a market value of $11 per share. A building on Smoltzs books was undervalued by $30,000, resulting in annual amortization of $1,500. Also, there was an unrecorded patent valued at $70,000, resulting in annual amortization of $7,000. The separate 2017 financial statements for Maddox and Smoltz are presented below:

Required: a. Prepare the journal entry to record the investment in the subsidiary.

b. Show the computation of Equity Income for 2017.

c. Show the computation of Equity Investment at December 31, 2017.

d. Prepare a consolidation worksheet for 2017.

	Maddox		Smoltz
Sales revenue	$760,000		$420,000
Cost of goods sold	(405,000	)	(266,000	)
Gross profit	355,000		154,000
Operating expenses	(202,400	)	(93,700	)
Equity income	51,800		_______
Net Income	$204,400		$ 60,300
Retained Earnings, 1/1/17	$662,300		$305,600
Net income	204,400		60,300
Dividends	(41,200	)	(24,650	)
Retained Earnings, 12/31/17	$825,500		$341,250
Cash and receivables	$199,800		$161,180
Inventory	243,450		135,090
Equity investment	533,150
Property, plant & equipment (Net)	745,800		304,630
Total Assets	$1,722,200		$600,900
Accounts payable	$ 41,300		$ 42,980
Accrued liabilities	56,400		50,070
Notes payable	0		90,000
Common stock	93,200		33,600
Additional paid-in capital	705,800		43,000
Retained Earnings, 12/31/17	825,500		341,250
Total Liabilities and Equities	$1,722,200		$600,900