b) other needed journal entries

• Record the amortized excess value reclassification entry.
• Record the excess value (differential) reclassification entry.
• Record the elimination of the intercompany accounts.

Palermo Inc. purchased 80 percent of the outstanding stock of Salina Ranching Company, located in Australia, on January 1, 20X3. The purchase price in Australian dollars (AS) was A$200,000, and A$40,000 of the differential was allocated to plant and equipment, which is amortized over a 10-year period. The remainder of the differential was attributable to a patent. Palermo Inc. amortizes the patent over 10 years. Salina Ranching's trial balance on December 31, 20X3, in Australian dollars is as follows Debits Credits Cash Accounts Receivable (net) Inventory Plant &Equipment ccumulated Depreciation Accounts Payable Payable to Palermo Inc Interest Payable 12% Bonds Payable Premium on Bonds Common Stock Retained Earnings Sales Cost of Goods Sold Depreciation Expense Operating Expenses Interest Expense Dividends Paid Total A$ 44,100 72,000 86,000 240,000 A$ 60,000 53,800 10,800 3,000 100,000 5,700 90,000 40,000 579,000 330,000 24,000 131,500 5,700 9,000 A$942,300 A$942,30e Assume that the U.S. dollar is the functional currency and that Palermo uses the fully adjusted equity method for accounting for its investment in Salina Ranching. A December 31, 20X3, trial balance for Palermo follows Assume that the U.S. dollar is the functional currency and that Palermo uses the fully adjusted equity method for accounting for its investment in Salina Ranching. A December 31, 20X3, trial balance for Palermo follows. Debits Credits Cash Accounts Receivable (net) Receivable from Salina Ranching Inventory Plant and Equipment Investment in Salina Ranching Cost of Goods Sold Depreciation Expense Operating Expenses Interest Expense Dividends Declared Accumulated Depreciation Accounts Payable Interest Payable Common Stock Retained Earnings, January 1, 28x3 Sales Income from Subsidiary Total $ 38,eee 148,8e8 6,488 128,8e8 58e,8ee 178,544 686.888 28,8e8 284,e00 2,800 58,888 $ 9e,e0 6e,8e8 2,800 58e,8ee 179,656 1,88e,888 $1,875,824 $1,875,824 Addltlonel Informetlon: 1. Salina Ranching uses average cost for cost of goods sold. Inventory increased by A$20,000 during the year. Purchases were made uniformly during 20X3. The ending inventory was acquired at theaverage exchange rate for the year 2. Plant and equipment were acquired as follows: Date January 28x1 January 1, 28x3 Cost A$188,898 68,808 3. Plant and equipment are depreciated using the straight-line method and a 10-year life with no residual value. 4. The payable to Palermo is in Australian dollars. Palermo's books show a receivable from Salina Ranching of $6,480. 5. The 10-year bonds were issued on July 1, 20X3. for A$106,000. The premium is amortized on a straight-line basis. The interest is paid on April 1 and October 1 6. The dividends were declared and paid on April 1 7. Exchange rates were as follows: A$ January 28x1 August 28x1 January 1, 28x3 April 1, 28x3 July 1, 28X3 December 31, 20X3 28x3 average 18.93 1-8.88 1-8.78 1-0.67 1-8.64 1-8.68 1-8.65 a. Prepare a set of consolidation entries, in general journal form, for the entries required to prepare a three-part consolidation worksheet as of December 31, 20X3. (If no entry Is required for a transactlon/event, select "No journal entry required" In the first account fleld.) view transaction list Consolidation Worksheet Entries Record the basic consolidation entry. Note: Enter debits before credits. Event Accounts Debit Credit Record entry Clear entry view consolidation entries Palermo Inc. purchased 80 percent of the outstanding stock of Salina Ranching Company, located in Australia, on January 1, 20X3. The purchase price in Australian dollars (AS) was A$200,000, and A$40,000 of the differential was allocated to plant and equipment, which is amortized over a 10-year period. The remainder of the differential was attributable to a patent. Palermo Inc. amortizes the patent over 10 years. Salina Ranching's trial balance on December 31, 20X3, in Australian dollars is as follows Debits Credits Cash Accounts Receivable (net) Inventory Plant &Equipment ccumulated Depreciation Accounts Payable Payable to Palermo Inc Interest Payable 12% Bonds Payable Premium on Bonds Common Stock Retained Earnings Sales Cost of Goods Sold Depreciation Expense Operating Expenses Interest Expense Dividends Paid Total A$ 44,100 72,000 86,000 240,000 A$ 60,000 53,800 10,800 3,000 100,000 5,700 90,000 40,000 579,000 330,000 24,000 131,500 5,700 9,000 A$942,300 A$942,30e Assume that the U.S. dollar is the functional currency and that Palermo uses the fully adjusted equity method for accounting for its investment in Salina Ranching. A December 31, 20X3, trial balance for Palermo follows Assume that the U.S. dollar is the functional currency and that Palermo uses the fully adjusted equity method for accounting for its investment in Salina Ranching. A December 31, 20X3, trial balance for Palermo follows. Debits Credits Cash Accounts Receivable (net) Receivable from Salina Ranching Inventory Plant and Equipment Investment in Salina Ranching Cost of Goods Sold Depreciation Expense Operating Expenses Interest Expense Dividends Declared Accumulated Depreciation Accounts Payable Interest Payable Common Stock Retained Earnings, January 1, 28x3 Sales Income from Subsidiary Total $ 38,eee 148,8e8 6,488 128,8e8 58e,8ee 178,544 686.888 28,8e8 284,e00 2,800 58,888 $ 9e,e0 6e,8e8 2,800 58e,8ee 179,656 1,88e,888 $1,875,824 $1,875,824 Addltlonel Informetlon: 1. Salina Ranching uses average cost for cost of goods sold. Inventory increased by A$20,000 during the year. Purchases were made uniformly during 20X3. The ending inventory was acquired at theaverage exchange rate for the year 2. Plant and equipment were acquired as follows: Date January 28x1 January 1, 28x3 Cost A$188,898 68,808 3. Plant and equipment are depreciated using the straight-line method and a 10-year life with no residual value. 4. The payable to Palermo is in Australian dollars. Palermo's books show a receivable from Salina Ranching of $6,480. 5. The 10-year bonds were issued on July 1, 20X3. for A$106,000. The premium is amortized on a straight-line basis. The interest is paid on April 1 and October 1 6. The dividends were declared and paid on April 1 7. Exchange rates were as follows: A$ January 28x1 August 28x1 January 1, 28x3 April 1, 28x3 July 1, 28X3 December 31, 20X3 28x3 average 18.93 1-8.88 1-8.78 1-0.67 1-8.64 1-8.68 1-8.65 a. Prepare a set of consolidation entries, in general journal form, for the entries required to prepare a three-part consolidation worksheet as of December 31, 20X3. (If no entry Is required for a transactlon/event, select "No journal entry required" In the first account fleld.) view transaction list Consolidation Worksheet Entries Record the basic consolidation entry. Note: Enter debits before credits. Event Accounts Debit Credit Record entry Clear entry view consolidation entries