On January 1, 20X9, Peery Company acquired 100 percent of Standard Company's common shares at underlying book value. Peery uses the equity method in accounting for its ownership of Standard. On December 31, 20X9, the trial balances of the two companies are as follows:

Peery Co. Standard Co.

Item Debit Credit Debit Credit

Current Assets $238,000 $95,000

Depreciable Assets 300,000 170,000

Investment in Standard Co. 100,000

Other

Expenses 90,000 70,000

Depreciation Expense 30,000 17,000

Dividends Declared 32,000 10,000

Accumulated Depreciation $120,000 $85,000

Current

Liabilities 50,000 30,000

Long-Term Debt 120,000 50,000

Common

Stock 100,000 50,000

Retained

Earnings 175,000 35,000

Sales 200,000 112,000

Income from Standard Co. 25,000

790,000 790,000 362,000 362,000

Required:

1- Prepare the journal entry to record the dividends received during year one.

2- Prepare the journal entry to record the effect of income from subsidiary on the parent's investments.

3- Prepare the consolidation entry necessary to prepare the worksheet at the end of year one.

4- Prepare a schedule to show your book value calculations.