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.)