On January 1, 2016, Power Company Purchased 80% of the Common

On January 1, 2016, Power Company purchased 80% of the common stock of Stuckey Company for $400,000. Stuckey Company reported common stock of $200,000 ($10 par value), other contributed capital of $60,000, and retained earnings of $120,000 on this date. The difference between implied value and the book value interest acquired is attributable to the under-valuation of land held by Stuckey Company. Stuckey Company reported net income for 2016 of $100,000. During 2016 Stuckey Company declared and paid a 20% stock dividend and a $24,000 cash dividend. Stuckey Company stock had a market value of $30 per share on the date the stock dividend was declared. Power Company uses the cost method to account for its investment in Stuckey Company.
Required:
A. Prepare the journal entries required in the books of Power Company to account for the investment in Stuckey Company.
B. Prepare in general journal form the workpaper entries necessary in the consolidated statements workpaper for the year ended December 31, 2016.
C. Prepare the workpaper entry to establish reciprocity in the 2017 consolidated statements workpaper.