Consolidation Working Paper Eliminations, Intercompany Merchandise Sales, Noncontrolling Interest Paymore Shoes acquired 80 percent of the voting stock of Spire Footwear on February 1, 2017, for $21 million. The fair value of the noncontrolling interest at the acquisition date was $3 million. The excess of Spires fair value over its $4 million book value was attributed to limitedlife identifiable intangible assets ($5 million, 5-year life) and goodwill. Paymores fiscal year ends January 31. As of February 1, 2020, the goodwill and identifiable intangibles are not impaired. There is no impairment of either intangible in fiscal 2021. Spire transfers merchandise to Paymore on a regular basis, at a markup of 25% on cost. Following is information on intercompany merchandise transactions for fiscal 2021:

Balance in Paymores beginning inventory, purchased from Spire, $1,000,000.

Balance in Paymores ending inventory, purchased from Spire, $750,000.

Total sales from Spire to Paymore, at the price charged to Paymore, $25 million.

Paymore uses the complete equity method to account for its investment in Spire on its own books. The separate trial balances for Paymore and Spire at January 31, 2021, are below

(in thousands)	Paymore	Spire
Current assets	10,000.00	4,500.00
Plant and equipment, net	1,200,000.00	750,000.00
Intangibles	101,360.00	-
Investment in Spire	22,080.00	-
Liabilities	(945,000.00)	(745,000.00)
Capital stock	(28,000.00)	(3,000.00)
Retained earnings, beginning	(340,000.00)	(5,000.00)
Sales revenue	(1,200,000.00)	(300,000.00)
Equity in net income	(440.00)	-
Cost of sales	980,000.00	200,000.00
Operating expenses	200,000.00	98,500.00
Total	-	-

Required

a. Calculate the allocation of goodwill between controlling and noncontrolling interests.

b. Calculate equity in net income, appearing on Paymores separate books ($440,000), and the noncontrolling interest in net income for fiscal 2021.

c. Prepare a working paper to consolidate the January 31, 2021, trial balances of Paymore and Spire. Label your eliminating entries (C), (I), (E), (R), (O), and (N).