PS. Prepare journal entries for the invester/buyer.

Problem 1: On January 1, 2014, Savage Company has the following balance sheet: Assets Liabilities & Equities $40,000 Cash $100,000 Current liabilities 120,000 110,000 Note Bonds receivable payable 70,000 200,000 Inventory Common stock ($10 par Land 40,000 Additional 150,000 paid-in-capital 120,000 250,000 Retained Buildings (net) earnings Equipment (net) 80,000 Total $750,000 Total $750,000 The fair values of the assets and liabilities are the same as their book values except for land (fair remaining useful lives of the buildings and equipment are 15 and 5 years, respectively. Salvage reported net income during 2014 of $130,000 and declared and paid dividends of $30,000. Required