Crow Corporation purchased 70 percent of West Company's voting common stock on January 1, 20x5, for $291,200. On that date, the non-controlling interest had a fair value of $124,800 and the book value of West's net assets was $380,000. The book values and fair values of West's assets and liabilities were equal except for land that had a fair value $14,000 higher than book value. The amount attributed to goodwill as a result of the acquisition is not amortized and has not been impaired. Crow Corporation and West Company Trial Balance Data December 31, 20x9 Crow Corporation West Company Item Debit Credit Debit Credit Cash and Receivables $81,300 $85.000 Inventory 200,000 110,000 Land, Buildings, & Equipment (net) 270,000 250,000 Investment in West Company Stock 290,200 Cost of Goods & Services 200,000 150,000 Depreciation Expense 40,000 30,000 Dividends Declared 35,000 5,000 Sales & Service Revenue $300,000 $200,000 Income from Subsidiary 24,500 Accounts Payable 60,000 30,000 Common Stock 200,000 150,000 Retained Earnings 532,000 250,000 Total $1,116,500 $1,116,500 $630,000 $630,000 On January 1, 20x9, Crow's inventory contained $30,000 of unrealized intercompany profits recorded by West. West's inventory on that date contained $15,000 of unrealized intercompany profits recorded on Crow's books. Both companies sold their ending 20x8 inventories to unrelated companies in 20x9. During 20x9, West sold inventory costing $37,000 to Crow for $62,000. Crow held all inventory purchased from West during 20x9 on December 31, 20x9. Also during 20x9, Crow sold goods costing $54,000 to West for $90,000. West continues to hold $20,000 of its purchase from Crow on December 31, 20x9. Assume Crow uses fully adjusted equity method. Required: a. Prepare all elimination entries needed to complete a consolidation worksheet as of December 31, 20x9. b. Prepare a consolidation worksheet as of December 31, 20x9. Is this an UPSTREAM OR DOWNSTREAM transaction? Is there Btor El: What is BVE: What is the Gross Profit What is BIPEIP: Do you CONFIRM OF DEFER the BIPEIP? Is the UPSTREAM OR DOWNSTREAM transaction? Is there Blor El What is BEE What is the Gross Profit What is BIPESP Do you CONFIRM OF DEFER the BIPEIP? Is the UPSTREAM OR DOWNSTREAM transaction? Is there What What is the Gross Prot What is PC Do you CONFIRM DEFER the PEP UPSTREAM DOWNSTREAM is WS Whether What De CORMOOPER PER P6-27 Differential and Equity method entries: BV FV 100% LIFE Land Goodwill X5 X6 X7 X8 X9 Net income Dividends 1 Confirm profit in Bl from 2008 downstream sale Defer profit in El from 2009 downstream sale Confirm profit in Bl from 2008 upstream sale Defer profit in El from 2009 upstream sale Investment in Sub Income from Sub NCI Common Stock Retained Eamings Income to NCI Elimination Entries; Crow Corp. Elimination Entries DR CR West Co. Consolidated Income Statement Sales Less: COGS Less: Depreciation Expense Income from West Co. Consolidated Net Income NCI in Net Income Controlling Interest in Net Income 300,000 (200,000) (40,000) 24,500 84,500 200,000 (150,000) (30,000) 20,000 84,500 20,000 Statement of Retained Earnings Beginning Balance Net Income Less: Dividends Declared Ending Balance 532,000 84,500 (35,000) 581,500 250,000 20,000 (5,000) 265,000 81,300 200,000 85,000 110,000 Balance Sheet Cash and Receivable Inventory Land, Buildings, and Equipment (net) Investment in West Co. Differential Goodwill Total Assets 250,000 270,000 290,200 841,500 445,000 Accounts Payable Common Stock Retained Earnings NCI in NA of West Co. Total Liabilities & Equity 60,000 200,000 581,500 30,000 150,000 265,000 841,500 445,000