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Assume that, on January 1, 2015, Jensen Company acquired a 90% interest in Saunders Company for a purchase price that was $450,000 over the book value of the subsidiarys Stockholders Equity on the acquisition date. Jensen uses the equity method to account for its investment in Saunders. Jensen assigned the acquisition-date AAP as follows:

Assume that, on January 1, 2015, Jensen Company acquired a 90% interest in Saunders Company for a purchase price that was $450,000 over the book value of the subsidiarys Stockholders Equity on the acquisition date. Jensen uses the equity method to account for its investment in Saunders. Jensen assigned the acquisition-date AAP as follows:

AAP Items	Initial Fair Value	Useful Life (years)
PPE	$200,000	20
Patent	60,000	10
Customer List	40,000	10
Goodwill	150,000	Indefinite
Total	$450,000

90% of if the Goodwill is allocated to the parent. Jensen and Saunders report the following financial statements December 31, 2018:

Income Statement

	Jensen	Saunders
Sales	$7,530,000	$1,913,000
Cost of goods sold	(4,854,000)	(843,300)
Gross Profit	2,676,000	1,069,800
Income (loss) from subsidiary	523,620
Operating expenses	(1,618,800)	(467,900)
Net income	$1,580,820	601,800

Statement of Retained Earnings

	Jensen	Saunders
BOY Retained Earnings	$ 8,784,400	$3,038,500
Net income	1,580,820	601,800
Dividends	(190,050)	(38,600)
Ending Retained Earnings	$10,175,170	$3,601,700

Balance Sheet

	Jensen	Saunders
Cash	$ 880,200	$ 662,600
Accounts receivable	1,080,500	897,300
Inventory	1,652,800	972,500
Equity Investment	3,838,770
PPE, net	6,610,600	2,553,100
Total Assets	$14,062,870	$5,085,500
Current Liabilities	$ 699,300	$400,200
Long-term Liabilities	1,509,600	790,000
Common Stock	603,200	118,100
APIC	1,075,600	175,500
Retained Earnings	10,175,170	3,601,700
Total Liabilities	$14,062,870	$5,085,500

1. Compute the EOY noncontrolling interest equity balance

2 .Prepare the consolidation journal entries.

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