Question: Topic: Complete equity method, consolidation working paper, end of first yearLO 2X-On Corporation acquired all of the voting common stock of Mobile on January 1,

Topic: Complete equity method, consolidation working paper, end of first yearLO 2X-On Corporation acquired all of the voting common stock of Mobile on January 1, 2010 for $10,000,000 in cash, when the book value of Mobile was $3,700,000. The $6,300,000 excess of acquisition cost over book value was allocated as follows:Inventory$ (200,000)FIFOPlant & equipment1,000,00025 year remaining life, straight-lineLease agreements2,000,0005 year remaining life, straight-lineTrademarks3,000,0006 year remaining life, straight-lineGoodwill500,000$100,000 impairment in 2010Total $6,300,000For 2010, Mobile reported net income of $1,500,000 and paid cash dividends of $200,000. X-On uses the complete equity method to account for its Investment in Mobile on its own books.Requireda.Calculate the 2010 equity in net income of Mobile.b. Prepare the journal entries for X-Ons own books for 2010 to report the above facts.c.The consolidation working paper at December 31, 2010 appears below. Fill in the eliminations necessary to consolidate X-On and Mobile.

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