Bennett Corporation owns 60 percent of the stock of Stone Container Company, which it acquired at book value in 20X1. On December 31, 20X3, Bennett Corporation purchased \(\$ 100,000\) par value bonds of Stone Container. The bonds originally were issued by Stone Container Company at par value. The coupon rate on the bonds is 9 percent. Interest is paid semiannually on June 30 and December 31 . Trial balances for the two companies on December \(31,20 \times 4\), are as follows:

All the interest income recognized by Bennett is related to its investment in Stone Container bonds.
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a. Prepare a consolidation workpaper for \(20 \mathrm{X} 4\) in good form.

b. Prepare a consolidated balance sheet, income statement, and retained earnings statement for 20X4.

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Bennett Corporation Debit Stone Container Company Credit Item Cash $ 61.600 Accounts Receivable 100.000 Inventory 120.000 Other Assets 340,000 Credit $ 20.000 80,000 110,000 250,000 Debit Investment in Stone Container Bonds 106.000 Investment in Stone Container Stock 126.000 Interest Expense 20.000 18.000 Other Expenses 368,600 182,000 Dividends Declared Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Interest Income Income from Subsidiary Total 40.000 10,000 $ 80,000 $ 50,000 200,000 200,000 300.000 100.000 214.200 70.000 450.000 250,000 8.000 30,000 $1,282,200 $1.282.200 $670,000 $670,000