Block Corporation was created on January 1, 20X0, to develop computer software. On January 1, 20X5, Foster Company purchased 90 percent of the common stock of Block Corporation at underlying book value. Trial balances for Foster Company and Block Corporation on December 31, 20X9, are as follows:

On January \(1,20 \times 7\), Block Corporation sold equipment to Foster Company for \(\$ 48,000\).
The equipment had been purchased for \(\$ 90,000\) on January 1, 20X5, by Block Company and was depreciated on a straight-line basis with an expected life of 10 years and no anticipated scrap value. The total expected life of the equipment is unchanged as a result of the intercompany sale.
\section*{Required}

a. Give all eliminating entries required to prepare a three-part consolidated working paper at December 31, 20X9.

b. Prepare a three-part workpaper for \(20 \mathrm{X} 9\) in good form.

Transcribed Image Text:

20X9 Trial Balance Data Foster Company Block Corporation Debit Debit Credit Credit Cash $ 82,000 $ 32,400 Accounts Receivable 80.000 90,000 Other Receivables 40.000 10,000 Inventory 200.000 130,000 Land 80,000 60,000 Buildings and Equipment 500,000 250,000 Investment in Block Corporation Stock 216.000 Cost of Goods Sold 500.000 250.000 Depreciation Expense 45,000 15,000 Other Expense 95,000 75.000 Dividends Declared Accumulated Depreciation Accounts Payable Other Payables Bonds Payable 40,000 20,000 $ 155,000 $ 75.000 63.000 35.000 95.000 250.000 20.000 200,000 Bond Premium 2.400 Common Stock Additional Paid-In Capital Retained Earnings Sales 210,000 50,000 110,000 235.000 150.000 680,000 385.000 Other Income 26,000 15,000 Income from Subsidiary 54,000 Total $1,878,000 $1.878.000 $932.400 $932.400