Comprehensive Problem: Differential Apportionment in Subsequent Period This problem is a continuation of P5.35. Pillow Corporation acquired 80 percent ownership of Sheet Company on January 1, 20X7, for $173,000. At that date, the fair value of the noncontrolling interest was $43,250. The trial balances for the two companies on December 31, 20X8, included 5-36 the following amounts: Sheet Company Pillow Corporation Item Debit Credit Debit Credit 31,000 71,000 1 18,000 30,000 150,000 Cash Accounts Receivable Inventory Land Buildings & Equipment Investment in Sheet Company Cost of Goods Sold Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Mortgages Payable Common Stock Retained Earnings $59,000 83,000 275,000 80,000 500,000 206,200 490,000 25,000 62,000 45,000 310,000 15,000 100,000 25,000 $ 180,000 86,000 200,000 300,000 385,000 650,000 24,200 $1.825.200 $ 90,000 30,000 70,000 50,000 140,000 470,000 Income from Sheet Company $1,825.200 $850,000 Additional Information 1. On January 1, 20X7, Sheet reported net assets with a book value of $150,000 and a fair value of $191,250. The difference between fair value and book value of Sheet's net assets is entirely to buildings and equipment. Accumulated depreciation on buildings and equi was $60,000 on the acquisition date. Sheet's depreciable assets had an estimated economi of 11 years on the date of combination. life 2. At December 31, 20X8, Pillow's management reviewed the amount attributed to gou Goodwill and concluded goodwill was impaired and should be reduced to $14,000. ling goodwill impairment were assigned proportionately to the controlling and nonco shareholders 3. Pillow used the equity method in accounting for its investment in Sheet 4. Detailed analysis of receivables and payables showed that Pillow owed Sheet $9,000 on December 31, 20X8. Required a. Give all journal entries recorded by Pillow with regard to its investment in Sheet during 20X8. b. Give all consolidation entries needed to prepare a full set of consolidated financial statements for 20X8. Prepare a three-part consolidation worksheet as of December 31, 20x8. c