Problem 3-16 (LO 3-3, 3-4)

Haynes, Inc., obtained 100 percent of Turner Companys common stock on January 1, 2014, by issuing 10,100 shares of $10 par value common stock. Hayness shares had a $15 per share fair value. On that date, Turner reported a net book value of $108,900. However, its equipment (with a five-year remaining life) was undervalued by $5,600 in the companys accounting records. Also, Turner had developed a customer list with an assessed value of $37,000, although no value had been recorded on Turners books. The customer list had an estimated remaining useful life of 10 years.

The following figures come from the individual accounting records of these two companies as of December 31, 2014:

Haynes

Turner

Revenues

$

(629,000

)

$

(338,000

)

Expenses

454,000

182,000

Investment income

Not given

0

Dividends declared

90,000

70,000

he following figures come from the individual accounting records of these two companies as of December 31, 2015:

Haynes

Turner

Revenues

$

(821,000

)

$

(407,000

)

Expenses

479,400

221,800

Investment income

Not given

0

Dividends declared

100,000

60,000

Equipment

523,000

338,000

a. What balance does Hayness Investment in Turner account show on December 31, 2015, when the equity method is applied?

Investment in Turner account

B. What is the consolidated net income for the year ending December 31, 2015?

consolidated net income

c-1.

What is the consolidated equipment balance as of December 31, 2015?

Consolidated Equipment

-2.

Would this answer be affected by the investment method applied by the parent?

Yes or No

d.Prepare entry *C for each of the following methods. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)