Simon Corporation purchased 100 percent of the common stock of Faith Corporation on December \(31,20 \times 2\), for \(\$ 189,000\). Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:

At the date of the business combination, Faith's net assets and liabilities approximated fair value except for inventory which had a fair value of \(\$ 84,000\) and buildings and equipment (net), which had a fair value of \(\$ 165,000\).
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a. Give the eliminating entry or entries needed to prepare a consolidated balance sheet immediately following the business combination.

b. Prepare a consolidation balance sheet workpaper.

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Item Cash Accounts Receivable 87.000 Inventory Buildings and Equipment (net) 110,000 220.000 Simon Corporation $ 26.000 Faith Corporation $ 18,000 37,000 60,000 150,000 Investment in Faith Corporation Stock Total Assets 189.000 $632.000 $265.000 Accounts Payable $ 92.000 $ 35,000 Notes Payable 150,000 80,000 Common Stock 100,000 60,000 Retained Earnings 290.000 90,000 Total Liabilities and Stockholders' Equity $632.000 $265.000