Power Corporation acquired 75 percent of the ownership of Best Company on January 1, 20X8, for \(\$ 96,000\). At that date, the fair value of Best's buildings and equipment was \(\$ 20,000\) greater than book value. Buildings and equipment are depreciated on a 10 -year basis. Although goodwill is not amortized, the management of Power Corporation concluded at December 31, 20X8, that goodwill involved in its purchase of Best Company shares had been impaired and the correct carrying value was \(\$ 2,500\).

Trial balance data for Power Corporation and Best Company on December 31, 20X8, are as follows:

\section*{Required}

a. Give all eliminating entries needed to prepare a three-part consolidation workpaper as of December 31, 20X8.

b. Prepare a three-part consolidation workpaper for 20X8 in good form.

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Power Corporation Best Company Cash Item Debit $ 47.500 Accounts Receivable 70,000 Inventory 90,000 Land 30.000 Buildings and Equipment 350,000 Credit Debit $ 21,000 12,000 25,000 15.000 150,000 Credit Investment in Best Co. Stock 100,500 Cost of Goods Sold 125,000 110,000 Wage Expense 42,000 27.000 Depreciation Expense 25,000 10,000 Interest Expense 12,000 4,000 Other Expenses 13.500 5.000 Dividends Declared 30.000 16,000 Accumulated Depreciation $145,000 $ 40,000 Accounts Payable 45,000 16,000 Wages Payable 17.000 9,000 Notes Payable 150,000 50,000 Common Stock 200,000 60,000 Retained Earnings 102.000 40,000 Sales 260.000 180,000 Income from Subsidiary 16.500 $935.500 $935,500 $395.000 $395,000