Blackbum Corporation acquired 100 percent ownership of MDK Company on May 13, 20X0, in a business combination recorded as a pooling of interests. Trial balances for the companies on December 31, 20X2, are as follows:

Blackburn Corporation uses the equity method in accounting for its ownership of MDK Company. Dividends were declared and paid on November 15. 20X2, by Blackburn Corporation and on December 20, 20X2, by MDK Company.
\section*{Required}

a. Prepare all eliminating entries needed to complete a three-part consolidation workpaper as of December 31, 20X2.

b. Prepare a consolidation workpaper as of December \(31,20 \times 2\).

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Blackburn Corporation Debit MDK Company Debit Credit Cash $ 97,000 $ 45,000 Accounts Receivable 80.000 50.000 Inventory 100.000 80,000 Buildings and Equipment 380.000 350.000 Investment in MDK Company 260.000 Cost of Goods Sold 110.000 90.000 Depreciation Expense Other Expenses Dividends Declared 20.000 15.000 28.000 25.000 15.000 10,000 Credit