Background

Pooler purchased $61\%$ of Scenic's outstanding common stock for $$646,419$ on January $1,20$X$6,$ when the book value of Scenic's net assets was equal to $$365,000.$ The non$-$controlling interest $(NCl)$ had an acquisition$-$date fair value of $$252,103.$ Trial balance data for Pooler and Scenic as of December $31,20$X$6$ are shown below. At the time of acquisition, Scenic's A$/$D balance was $$35,000.$ Additionally, several assets had fair values that differed from their book values $($BV$)$: Inventory, $$21,000$ above BV; Land, $$10,000$ below BV; Equipment, $$60,000$ above BV; and a copyright, $$18,000$ above BV$.$ The equipment had six years remaining in its service life, and the copyright had five years remaining. Per GAAP, management evaluated goodwill and found no evidence of impairment.

During $20$X$6,$ Pooler and Scenic had several transactions that occurred between the two companies. First, the companies had intercompany payables and receivables totaling $$15,000.$ Second, Pooler sold inventory to Scenic for $$85,000$ that cost Pooler $$50,000.$ Third, Scenic sold inventory to Pooler for $$80,000$ with a cost of $$58,000.$ At the end of $20x6,$ Pooler had $$25,000$ of the inventory from Scenic in its inventory. Scenic's year$-$end inventory count showed $$40,000$ of inventory Ifmaining that it had purchased from Pooler. As this was Pooler's first year of ownership of Scenic, there were no intercompaty inventory transactions in $205.$

Pooler uses the fully$-$adjusted equity method in accounting for its investment in Scenic.

Instructions

Prepare all equity$-$method entries under the fully$-$adjusted equity method related to the investment in Scenic during $206$ including Pooler's initial purchase. You may use a spreadsheet or document.

Prepare a consolidation worksheet for $206$ using the accompanying template that includes all necessary adjustments needed to produce a single income statement, statement of retained earnings, and balance sheet.

Prepare the $20$X$6$ year end Balance Sheet and Income Statement.

TABLE $1$: Trial Balance as of December $31,206$

$\backslash$table$[[$Account$,$Pooler,Scenic

$],[,Dr,Cr,Dr,Cr$