On January 1, 2019 Roberts Corporation acquired 100% of the outstanding voting stock of Williams Company in exchange for $726,000 cash. At that time, although Williams book value was $560,000, Roberts assessed Williams total business fair value at $726,000.

The book values of Williams individual assets and liabilities approximated their acquisition-date fair values except for the equipment account which was undervalued by $100,000. The undervalued equipment had a 5-year remaining life at the acquisition date. Any remaining excess fair value was attributed to goodwill.

Separate financial statements for both companies on December 31, 2019 are shown below:

	Roberts	Williams
Revenues	(800,000)	(500,000)
Cost of Goods Sold	500,000	300,000
Depreciation Expense	100,000	60,000
Equity in Income of Williams	(120,000)	0
Net Income:	(320,000)	(140,000)

Retained Earnings 1/1/19	(1,085,000)	(320,000)
Net Income (above)	(320,000)	(140,000)
Dividends paid	115,000	60,000
Retained Earnings 12/31/19:	(1,290,000)	(400,000)

Cash	234,000	125,000
Accounts Receivable	365,000	172,000
Inventory	375,000	225,000
Investment in Williams Stock	786,000	0
Land	180,000	200,000
Buildings and Equipment (net)	580,000	283,000
Total Assets:	2,520,000	1,005,000
Accounts Payable	(110,000)	(65,000)
Notes Payable	(310,000)	(300,000)
Common Stock	(610,000)	(150,000)
Additional Paid-in Capital	(200,000)	(90,000)
Retained Earnings, 12/31/19	(1,290,000)	(400,000)
Total Liabilities and Stockholder's Equity	2,520,000	1,005,000

Required:

1. Assuming that Roberts accounts for its investment in Williams using the equity method, prepare the general journal entries (i.e. "real entries") for the year ending December 31, 2019. When posted to t-accounts, these entries should allow you to "prove" both the investment in Williams and the Equity in Income of Williams (i.e. investment income) balances of $786,000 and $120,000, respectively, as shown on the statements above.

2. Next, prepare all of the necessary eliminating entries (i.e. "worksheet entries") needed at December 31, 2019 and prepare the necessary worksheet to consolidate the two companies as of December 31, 2019. Your worksheet should include the amounts which would be reported on the income statement and statement of retained earnings as well as the balance sheet.

3. Finally, assume that Williams earns net income of $180,000 and paid dividends of $50,000 during the following year (i.e. 2020). Repeat requirements 1 and 2 above for the year ending December 31, 2020. You are not required to prepare the worksheet for 2020.