3.(25 pts) Abbot Company purchased 80% of Costello Company on January 1, 20X1.

The purchase price paid was $600,000.On that day, the book value of Costello was $500,000.Excess of cost over book value is due to goodwill.

Included in Costello's income are intercompany sales to Abbot of $40,000 with a cost to Costello of $25,000. 30% of this inventory is on hand in the Abbot inventory at December 31, 20X3.In addition, inventory sold at a profit of $5,000 was in the inventory of Abbot at December 31, 20X2.

Complete the consolidation worksheet.First, complete the financial statements below

Below are the balances of accounts of Abbot and Costello at December 31, 20X3.

B C E G H 12 Consolidation Entries Consolidated Bal. 13 Abbot Costello Dr. Cr. 14 Sales 50,000 250,000 15 Expenses 30,000 150,000 16 Income from S. 17 Income 100,000 NCI 19 Controlling Interest 20 21 Retained Earnings Jan 1, 10 700,000 190,000 22 Dividends 100 000 23 Retained Earnings Dec 31, 10 290,000 24 25 26 Cash 120,000 30,000 27 Receivables 90,000 70,000 28 Inventory 100,000 100,000 29 Equipment (net) 100,000 350,000 30 Patents 50,000 31 Investment in Costello 796,400 32 33 34 Goodwill 35 Land 100,000 100,000 36 Building (net) 120 000 37 1,426,400 800,000 38 39 40 Accounts Payable 100,000 50.000 41 Capital Stock 460,000 42 Non-Controlling Interest 43