Patriot corporation acquired 80 percent ownership of seahawk corporation on january 1, 20x8, for $200,000. at that date, seahawk reported common stock outstanding of $75,000 and retained earnings of $150,000. the fair value of the noncontrolling interest was $50,000. the differential is assigned to equipment, which had a fair value $25,000 greater than book value and a remaining economic life of five years at the date of the business combination. seahawk reported net income of $40,000 and paid dividends of $20,000 in 20x8.

required:

1) provide the journal entries recorded by patriot during 20x8 on its books if it accounts for its investment in seahawk using the equity method.

2) give the consolidating entries needed at december 31, 20x8, to prepare consolidated financial statements.

Asmall town wants to build some new recreational facilities. the proposed facilities include a swimming pool, recreation center, basketball court and baseball field. the town council wants to provide the facilities which will be used by the most people, but they face budget and land limitations. the town has $400,000 and 14 acres of land. the pool requires locker facilities which would be in the recreation center, so if the swimming pool is built the recreation center must also be built. also, the council has only enough flat land to build the basketball court or the baseball field. the daily usage and cost of the facilities (in $1,000) are shown below. which facilities should they build? facilityusagecost ($1,000)landswimming pool4001002recreation center5002003basketball court3001504baseball field2001005