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Item 1

Pea Corporation acquired 80 percent of Split Brewing Companys stock on January 1, 20X1, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 20 percent of Splits book value. On January 1, 20X1, Split issued $300,000 par value, 8 percent, 10-year bonds to Malt Company for $360,000. Pea subsequently purchased $100,000 of the bonds from Malt for $102,000 on January 1, 20X3. Interest is paid semiannually on January 1 and July 1. Summarized balance sheets for Pea and Split as of December 31, 20X4, follow:

PEA CORPORATION
Balance Sheet
December 31, 20X4
Cash & Receivables	$	122,500		Accounts Payable	$	40,000
Inventory		200,000		Bonds Payable		400,000
Buildings & Equipment (net)		320,000		Common Stock		200,000
Investment in Split Company:				Retained Earnings		309,627
Bonds		101,607
Stock		205,520
Total Assets	$	949,627		Total Liabilities & Owners Equity	$	949,627

SPLIT BREWING COMPANY
Balance Sheet
December 31, 20X4
Cash & Receivables	$	124,000		Accounts Payable	$	28,000
Inventory		150,000		Bonds Payable		300,000
Buildings & Equipment (net)		360,000		Bond Premium		39,739
				Common Stock		100,000
				Retained Earnings		166,261
Total Assets	$	634,000		Total Liabilities & Owners Equity	$	634,000

At December 31, 20X4, Split holds $42,000 of inventory purchased from Pea, and Pea holds $26,000 of inventory purchased from Split. Split and Pea sell inventory to each other at cost plus markups of 30 percent and 40 percent, respectively. Assume total sales from Pea to Split were $100,000 and from Split to Pea were $50,000. Required: a. Prepare all consolidation entries needed on December 31, 20X4, to complete a consolidated balance sheet worksheet. Assume Split earned $74,476 and paid $10,000 in dividends during the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.)

b. Prepare a consolidated balance sheet worksheet. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)

c. Prepare a consolidated balance sheet in good form. (Do not round your intermediate calculations. Round your final answers to nearest whole dollar.)