On May 1, 2015, Peters Company purchased 80% of the common stock of Smith Company for $50,400. Additional data concerning these two companies for the years 2015 and 2016 are: 2015 2016 Peters Smith Peters Smith Common stock $107,800 $24,200 $107,800 $24,200 Other contributed capital 36,900 9,600 36,900 9,600 Retained earnings, 1/1 86,300 10,500 138,200 52,400 Net income (loss) 68,400 44,100 40,100 (5,300 ) Cash dividends (11/30) 16,500 2,200 4,500 -0- Any difference between book value and the value implied by the purchase price relates to Smith Company's land. Peters Company uses the cost method to record its investment. (a) Your answer is partially correct. Prepare the workpaper entries that would be made on a consolidated statements workpaper for the years ended December 31, 2015 and 2016 for Peters Company and its subsidiary, assuming that Smith Company's income is earned evenly throughout the year. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation 2015 Dividend Income Debit 1,760 Credit Dividends Declared - Subsidiary Company (To record dividend income) Common Stock - Subsidiary Company 24,200 Other Contributed Capital - Subsidiary Company 9,600 Retained Earnings - Subsidiary Company 10,500 Difference between Implied and Book Value 4000 Subsidiary Income Purchased 14,700 Investment in Subsidiary Noncontrolling Interest (To eliminate investment in subsidiary and create noncontrolling interest) Land Difference between Implied and Book Value (To eliminate excess of the 4000 book value of equity acquired.) 2016 Investment in Subsidiary 21760 Retained Earnings - Parent Company (To establish reciprocity) Common Stock - Subsidiary Company 24,200 Other Contributed Capital - Subsidiary Company 9,600 Retained Earnings - Subsidiary Company 52400 Land Investment in Subsidiary Noncontrolling Interest (To eliminate investment in subsidiary and create noncontrolling interest) 4000 1,760 50,400 12,600 4000 21760 67,100 23,100