PLEASE PREPARE Equity method entries for 2011 and summary of debits and credits to investment income and investment account

During 2011 the following transactions took place:

Betas sales were entirely made to Alpha. Betas sales had a markup of 1.6 times COGS. At the end of 2011, 20 percent of the items sold to Alpha were still in Alphas inventory. Alpha sold some product components to Beta for $96,000. Alphas sales to Beta had a markup of 1.2 times COGS. At the end of 2011, 50 percent of the items sold to Beta were still in Betas inventory.

Alpha sold equipment to Beta on January 1, 2011 for $40,000. This equipment had a net book value of $60,000 and a useful life of four years at the time of the sale.

Beta sold a building to Alpha for on July 1, 2011 for $525,000. This building had a net book value of $393,750 and a useful life of 17.5 years at the time of the sale.

There was a balance of $85,000 in intercompany accounts payable and receivable on December 31, 2011.

Beta issued a five year bond on December 30, 2011 at par with the following characteristics:

BONDS ISSUED ON DEC 30 2011 WHEN MAKT RATE = COUPON RATE = 12% FACE VALUE = 500,000 MATURE DEC 31 2016 BETA Calculations COUPON PRINCIPAL SUM PV FACTOR PV BOND 12% 12% RATE Year 0 500,000 Year 1 60,000 60,000 1/(1.12)^1 53,571 Year 2 60,000 60,000 1/(1.12)^2 47,832 Year 3 60,000 60,000 1/(1.12)^3 42,707 Year 4 60,000 60,000 1/(1.12)^4 38,131 Year 5 60,000 500,000 560,000 1/(1.12)^5 317,759 500,000