East Corporation purchased 70% of West Company's voting common stock on January 1, 2010 for $291,200.On that date, the noncontrolling 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 identifiable assets and liabilities were equal on the date of acquisition.

Trial balance data for East and West on December 31, 2014 have been entered into the consolidation workpaper on the worksheet labeled "2014 Consolidation."

A prior year downstream inventory transaction resulted in $30,000 remaining unrealized profit at the start of 2014.A prior year upstream inventory transaction resulted in $15,000 remaining unrealized profit at the start of 2014.Both companies sold their ending 2013 inventories to unrelated companies in 2014.

During 2014, East sold inventory costing $32,000 to West for $57,000.West held all inventory purchased from East during 2014 on December 31, 2014.Also during 2014, West sold goods costing $54,000 to East for $90,000.East continues to hold $20,000 of its purchase from West on December 31, 2014.

Assume East uses the fully adjusted equity method.

Using the above data:

1.Prepare the equity method entries that East would have recorded during 2014 related to its Investment in West.Use the worksheet labeled "Equity Method Entries" for your answer.

2.Calculate the January 1, 2014 balance in the Investment in West account.Enter your answer after your last journal entry on the "Equity Method Entries" worksheet.

3.Complete the 2014 consolidation workpaper.Use the worksheet labeled "2014 Consolidation" for your answer.It is a good idea to include the elimination entries in journal form below the workpaper.Check Figures:Consolidated Assets - $1,003,800; Non-controlling Interest - $132,900