Hart Corporation purchased 70 percent of the voting common shares of Bock Company on January (1,20 times

Question:

Hart Corporation purchased 70 percent of the voting common shares of Bock Company on January $1,20 \times 2$, for $\$ 94,000$. At that date, Bock Company had $\$ 80,000$ of common stock outstanding and retained earnings of $\$ 20,000$. The excess of the amount paid over underlying book value is assigned to buildings and equipment which had a fair value $\$ 20,000$ greater than book value and a remaining 10 -year life and to patents that had a remaining life of five years at the date of the business combination. Trial balances for the companies as of December 31, 20X3, are as follows:

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On December 31, 20X2, Bock Company purchased inventory for $\$ 32,000$ and sold it to Hart Corporation for $\$ 48,000$. Hart Corporation resold $\$ 27,000$ of the inventory during 20X3 and had the remaining balance in inventory at December $31,20 \times 3$.
During 20X3, Bock sold inventory purchased for $\$ 60,000$ to Hart for $\$ 90,000$, and Hart resold all but $\$ 24,000$ of its purchase. On March 10, 20X3, Hart sold inventory purchased for $\$ 15,000$ to Bock for $\$ 30,000$. Bock sold all but $\$ 7,600$ of the inventory prior to December $31,20 \mathrm{X3}$.
During 20X2, Bock sold land it had purchased for $\$ 22,000$ to Hart for $\$ 39,000$. Hart plans to build a warehouse on the property in the near future.
\section*{Required}

a. Give all eliminating entries needed to prepare a full set of consolidated financial statements at December 31, 20X3, for Hart Corporation and Bock Company.

b. Prepare a three-part consolidation workpaper for 20X3.

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