Emerald Corporation purchased 10,500 shares of the common stock and 800 shares of the 8 percent preferred stock of Pert Company on December 31, 20X4, at underlying book value. Pert Company reported the following balance sheet amounts on January 1, 20X5:

The preferred stock of Pert Company is \(\$ 100\) par value, and the common stock is \(\$ 10\) par value. The preferred dividends are cumulative and are two years in arrears on January 1, 20X5. Pert Company reports net income of \(\$ 34,000\) for \(20 \mathrm{X} 5\) and pays no dividends.
\section*{Required}

a. Present the workpaper eliminating entries needed to prepare a consolidated balance sheet on January \(1,20 \times 5\).

b. Assuming Emerald Corporation reported income from its separate operations of \(\$ 80,000\) in 20X5, compute the amount of consolidated net income and the amount of income to be assigned to noncontrolling shareholders in the 20X5 consolidated income statement.

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Cash Accounts Receivable Inventory $ 30.000 Accounts Payable $ 20.000 70,000 Bonds Payable 100.000 120.000 Preferred Stock 200,000 Buildings and Equipment 600.000 Common Stock 150.000 Less: Accumulated Depreciation Total Assets (150,000) Retained Earnings 200.000 $670.000 Total Liabilities and Equities $670,000