PROBLEM 8-1 Multiple Stock Purchases Sarko Company had 300,000 shares of $10 par value common stock outstanding at all times, and retained earnings balances as indicated here: Retained Earnings January 1, 2010 $260,000 January 1, 2011 540,000 January 1, 2012 630,000 January 1, 2013 820,000 Pelzer Company acquired Sarko Company stock through open-market purchases as follows: Date % Acquired Shares Cost 1/1/10 10% 30,000 $ 365,000 1/1/11 25% 75,000 960,000 1/1/12 45% 135,000 1,890,000 80% Sarko Company declared no dividends during this period. The fair values of Sarko Companys assets and liabilities were approximately equal to their book values throughout this period (2010 through 2012). Pelzer Company uses the cost method. Required: A. Prepare a schedule to compare investment cost with the book value of equity acquired. B. Prepare elimination entries for the preparation of a consolidated statements workpaper on December 31, 2012.