Peel Corporation purchased 60 percent of Split Products Companys shares on December 31, 20X7, for $216,000. At that date, the fair value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Splits common stock for $97,000. Summarized balance sheets for Split on the dates indicated are as follows:

December 31 20X7, 20X8, 20X9

Assets :

Cash $46,000 $76,000 $96,000

Accounts Receivable 53,000 93,000 123,000

Inventory 73,000 103,000 163,000

Buildings & Equipment (net) 360,000 340,000 320,000

Total Assets: $532,000 $612,000 $702,000

Liabilities & Equities :

Accounts Payable$67,000 $117,000 $157,000

Bonds Payable 105,000 105,000 105,000

Common Stock 155,000 155,000 155,000

Retained Earnings 205,000 235,000 285,000

Total Liabilities & Equities : $532,000 $612,000 $702,000

Split paid dividends of $24,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and amortizes all differentials over 10 years against the related investment income. All differentials are assigned to patents in the consolidated financial statements.

a. Compute the balance in Peels Investment in Split Products Company Stock account on December 31, 20X8.

Balance in investment account

$234,000

Correct!

b. Compute the balance in Peels Investment in Split Products Company Stock account on December 31, 20X9.

	Balance in investment account____________

?

c. Prepare the consolidation entries needed as of December 31, 20X9, to complete a three-part consolidation worksheet.

A of C:Record the basic consolidation entry.

Common Stock $155,000 Debit

Retained Earnings $235,000 Debit

NCI in NI of Split Products Co _______

Income from Split Products Co_______

Dividends Declared_______

Investment in Split Products Co_______

NCI of NA in Split Products Co $88,000 Credit

B of C:Record the entry to amortize the excess value reclassification.

Amortization Expense______

Income from Split Products Co______

C of C: Record the excess value (differential) reclassification entry.

Patents______

Investment in Split Products Co______

*ALL NUMBERS ENTERED ARE CORRECT! ALL ACCOUNT TITLES IN JOURNAL ENTRIES ARE CORRECT (but maybe not complete)*