PLEASE PREPARE Equity method entries for 2012 and summary of debits and credits to investment income and investment account;

During 2012 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 2012, 15 percent of the items sold to Alpha were still in Alphas inventory. Alpha charged a consulting fee of $50,000 to Beta, included in Betas operating expenses.

In 2012 there was a $50,000 goodwill impairment.

Alpha purchased all of Betas bonds in the bond market for $485,128 on December 31, after the 2012 coupon payment. At that time the market rate was 13%.

BOND REPURCHASE DEC 31 2011 Market price using new discount rate COUPON PRINCIPAL SUM PV FACTOR PV BOND 12% 10% RATE Year 0 Year 1 Year 2 60,000 60,000 1/(1.13)^1 53,097 Year 3 60,000 60,000 1/(1.13)^2 46,989 Year 4 60,000 60,000 1/(1.13)^3 41,583 Year 5 60,000 500,000 560,000 1/(1.13)^4 343,458 485,128