Speedy Delivery Service purchased at book value 80 percent of the voting shares of Acme Real Estate Company. On January 1, 20X3, the date of purchase, Acme Real Estate reported common stock of \(\$ 300,000\) and retained earnings of \(\$ 100,000\). During 20X3 Speedy Delivery provided courier services for Acme Real Estate in the amount of \(\$ 15,000\). Also during 20X3, Acme Real Estate purchased land for \(\$ 1,000\). The land was then sold to Speedy Delivery Service for \(\$ 26,000\) so that Speedy Delivery could proceed with building a new transportation center. Speedy Delivery reported \(\$ 65,000\) of operating income from its delivery operations in 20X3. Acme Real Estate reported net income of \(\$ 40,000\) and paid dividends of \(\$ 10,000\) in \(20 \mathrm{X} 3\).

\section*{Required}

a. Compute consolidated net income for 20X3.

b. Give all journal entries recorded by Speedy Delivery Service related to its investment in Acme Real Estate assuming Speedy uses the basic equity method in accounting for the investment.

c. Give all eliminating entries required in preparing a consolidation workpaper as of December 31, 20X3.