Consolidation Eliminations Several Years after Acquisition(2c)

Paramount Corporation acquired its 75 percent investment in Sun Corporation in January 2012, for $1,455,000 and accounts for its investment internally using the complete equity method. At the acquisition date, total book value of Sun was $750,000 including $400,000 of retained earnings, and the estimated fair value of the 25 percent noncontrolling interest was $395,000. The fair values of Sun's assets and liabilities were equal to their carrying values, except for the following items:

	Fair value less Book value
Accounts receivable	$(50,000)
Inventory	(62,500)
Equipment (10 years, straight-line)	(200,000)
Patents (5 years, straight-line)	100,000
Deferred tax liabilities (created as a result of the nontaxable acquisition)	37,500

The receivables were collected and the inventory sold during the first three years following the acquisition. Deferred tax liabilities of $30,000 were reversed during 20122017. An impairment test made at the end of 2017 indicates a remaining value of $1,000,000 for the goodwill recognized as a result of the acquisition. Sun's shareholders' equity is $1,250,000 including $900,000 of retained earnings, at the end of 2017.

For all answers below: Enter answers using all zeros, do not abbreviate to thousands or millions.

(c) Assume eliminating entry (C), to reverse Paramount's equity method entries for 2018, has been made. Prepare 2018 eliminating entries (E) and (R) to adjust Sun's assets to the correct values as of the beginning of 2018, eliminate the remainder of the investment, and recognize the beginning-of-2018 value of the noncontrolling interest.

Consolidation Journal
Description	Debit	Credit
(E)
Shareholders' equity-Sun	?	0
Investment in Sun	0	?
Noncontrolling interest in Sun	0	?
(R)
Goodwill	?	0
Equipment, net	0	?
Deferred tax liabilities	0	?
Investment in Sun	0	?
Noncontrolling interest in Sun	0	?