Plaza Corporation purchased 70 percent of Square Company’s voting common stock on January 1, 20X5, for $291,200. On that date, the noncontrolling interest had a fair value of $124,800 and the book value of Square’s net assets was $380,000. The book values and fair values of Square’s assets and liabilities were equal except for land that had a fair value $14,000 higher than book value. The amount attributed to goodwill as a result of the acquisition is not amortized and has not been impaired.

On January 1, 20X9, Plaza’s inventory contained $30,000 of unrealized intercompany profits recorded by Square. Square’s inventory on that date contained $15,000 of unrealized intercompany profits recorded on Plaza’s books. Both companies sold their ending 20X8 inventories to unrelated companies in 20X9.

During 20X9, Square sold inventory costing $37,000 to Plaza for $62,000. Plaza held all inventory purchased from Square during 20X9 on December 31, 20X9. Also during 20X9, Plaza sold goods costing $54,000 to Square for $90,000. Square continues to hold $20,000 of its purchase from Plaza on December 31, 20X9. Assume Plaza uses the fully adjusted equity method.

Required

a. Prepare all consolidation entries needed to complete a consolidation worksheet as of December 31, 20X9.

b. Prepare a consolidation worksheet as of December 31, 20X9.

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PLAZA CORPORATION AND SQUARE COMPANY Trial Balance Data December 31, 20X9 Item Cash and Receivables Inventory Land, Buildings, & Equipment (net) Investment in Square Company Cost of Goods & Services Depreciation Expense Dividends Declared Sales & Service Revenue Income from Square Company Accounts Payable Common Stock Retained Earnings Total Plaza Corporation Debit $ 81,300 200,000 270,000 290,200 200,000 40,000 35,000 $1,116,500 Credit $ 300,000 24,500 60,000 200,000 532,000 $1,116,500 Square Company Debit $85,000 110,000 250,000 150,000 30,000 5,000 $630,000 Credit $200,000 30,000 150,000 250,000 $630,000