Proud Corporation purchased 80 percent of the voting stock of Stergis Company on January 1, 20X3, at underlying book value. Proud Corporation uses the equity method in accounting for its ownership of Stergis. On December 31, 20X4, the trial balances of the two companies are as follows:

\section*{Required}

a. Give all eliminating entries required on December \(31,20 \mathrm{X} 4\), to prepare consolidated financial statements.

b. Prepare a three-part consolidation workpaper as of December 31, 20X4.

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Proud Corporation Stergis Company Current Assets Item Depreciable Assets (net) Investment in Stergis Company Stock Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities Long-Term Debt Debit Credit Debit Credit $ 235,000 $150.000 500,000 300,000 152,000 25,000 15,000 150,000 90.000 50,000 15.000 $ 200,000 $ 90,000 70,000 50,000 100,000 120,000 Common Stock 200.000 100,000 Retained Earnings 284,000 70,000 Sales 230,000 140.000 Income from Subsidiary 28,000 $1,112.000 $1,112.000 $570,000 $570,000