Skyhigh Airlines acquired 80 percent of the stock of Klunker Car Rentals for \(\$ 285,000\) on January 1, 20X2. Summarized balance sheets for the two companies on January 1, 20X2, are presented below:

At the time of acquisition, Klunker's land had an estimated value of \(\$ 40,000\), its buildings and equipment had a value of \(\$ 250,000\), and its notes payable had a fair value of \(\$ 108,000\). Book values and fair values were approximately equal for all other assets and liabilities.
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a. Give all eliminating entries needed to prepare a consolidated balance sheet for January 1, 20X2.

b. Complete a consolidated balance sheet workpaper.

c. Prepare a consolidated balance sheet in good form.

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Klunker Car Rentals Balance Sheet January 1, 20X2 Cash and Receivables $ 90,000 Accounts Payable Inventory 60,000 Taxes Payable Land 30.000 Notes Payable $ 60.000 30,000 100,000 Buildings and Equipment (net) 230.000 Common Stock 200,000 Marketable Securities 80,000 Retained Earnings 100,000 Total Assets $490,000 Total Liabilities and Stockholders' Equity $490,000 Cash and Receivables Inventory Land Planes and Equipment (net) Investment in Klunker Car Rentals Total Assets Skyhigh Airlines Balance Sheet January 1, 20X2 $ 140.000 Acounts Payable $ 190.000 30,000 Taxes Payable 15.000 70.000 Bonds Payable 600.000 790.000 Common Stock 200.000 285,000 Retained Earnings 310.000 $1,315.000 Total Liabilities and Stockholders' Equity $1.315.000