1) Preparing all the Elimination and Adjustments that would be Made on the 20X1 Consolidated Worksheet:
Event	General Journal	Debit	Credit
CY1	Subsidiary Income	$7,000
	Investment in Salt Company		$7,000
CY2	Investment in Salt Company	$8,000
	Dividends Declared		$8,000
EL	Common Stock - Salt	$80,000
	Retained Earnings - Salt	$136,000
	Investment in Salt Company		$216,000
D	Depreciable Fixed Assets*	$50,000
	Investment in Salt Company		$45,000
	Accumulated Depreciation		$5,000
	*No accumulated depreciation existed on the date of acquisition
A	Depreciation Expense	$5,000
	Accumulated Depreciation		$5,000
2) Preparing the 20X1 Consolidated Income Statement and its Related Distribution Schedules:
Pepper Company and Salt Company
Consolidated Income Statement
For Year Ended December 31, 20X1
Revenue	$300,000
Less: Expenses (add $5,000 adjustment)	$250,000
Consolidated net income	$50,000
Distributed to noncontrolling interest	$3,000
Distributed to controlling interest	$47,000
Subsidiary Salt Company Income Distribution
		Internally generated net income	$15,000
		Adjusted income	$15,000
		NCI share	20%
		NCI	$3,000
Parent Pepper Company Income Distribution
Depreciable fixed assets	$5,000	Internally generated net income	$40,000
		80% * Salt adjusted income of $15,000	$12,000
		Controlling interest	$47,000

A. A. Do worksheet for Pepper and Salt Company. Excerise 8