Patten Corporation acquired an 85% interest in Savage Company for $3,100,000 on January 1, 2024. On this date, the balances in Savage Company’s capital stock and retained earnings accounts were $2,000,000 and $700,000, respectively. An examination of Savage Company’s books on this date revealed the following:

The remaining useful life of the plant and equipment is 10 years, and all the inventory was sold in 2024. The net income from Patten Corporation’s own operations was $950,000 in 2024 and $675,000 in 2025. Savage Company’s net income for the respective years was $110,000 and $180,000. No dividends were declared.

Required:
A. Prepare a Computation and Allocation Schedule for the difference between book value of equity and the value implied by the purchase price.
B. Prepare the consolidated statements workpaper eliminating entries for 2024 and 2025 in general journal form, under each of the following assumptions:
1. The cost method is used to account for the investment.
2. The partial equity method is used to account for the investment.
3. The complete equity method is used to account for the investment.
C. Calculate the controlling interest in consolidated net income for 2024 and 2025.

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Current assets Inventory Marketable securities Plant and equipment Land Liabilities Book Value $ 650,000 560,000 430,000 1,200,000 400,000 540,000 Fair Value $ 650,000 610,000 430,000 1,600,000 900,000 540,000