Mortar Corporation acquired 80 percent ownership of Granite Company on January 1, 20X7, for $173,000. At that date, the fair value of the noncontrolling interest was $43,250. The trial balances for the two companies on December 31, 20X7, included the following amounts:

	Mortar Corporation					Granite Company
Item	Debit		Credit			Debit		Credit
Cash	$	38,000				$	25,000
Accounts Receivable		50,000					55,000
Inventory		240,000					100,000
Land		80,000					20,000
Buildings & Equipment		500,000					150,000
Investment in Granite Company Stock		202,000
Cost of Goods Sold		500,000					250,000
Depreciation Expense		25,000					15,000
Other Expense		75,000					75,000
Dividends Declared		50,000					20,000
Accumulated Depreciation			$	155,000				$	75,000
Accounts Payable				70,000					35,000
Mortages Payable				200,000					50,000
Common Stock				300,000					50,000
Retained Earnings				290,000					100,000
Sales				700,000					400,000
Income from Subsidiary				45,000
	$	1,760,000	$	1,760,000		$	710,000	$	710,000

Additional Information

1.	On January 1, 20X7, Granite reported net assets with a book value of $150,000 and a fair value of $191,250. Accumulated depreciation on Buildings and Equipment was $60,000 on the acquisition date.
2.	Granites depreciable assets had an estimated economic life of 11 years on the date of combination. The difference between fair value and book value of Granites net assets is related entirely to buildings and equipment.
3.	Mortar used the equity method in accounting for its investment in Granite.
4.	Detailed analysis of receivables and payables showed that Granite owed Mortar $16,000 on December 31, 20X7.

Required:

a.

Prepare all journal entries recorded by Mortar with regard to its investment in Granite during 20X7. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal Entry Worksheet

Record the initial investment in Granite Co.

Record Mortar Corp.'s 80% share of Granite Co.'s 20X7 income.

Record Mortar Corp.'s 80% share of Granite Co.'s 20X7 dividend.

Record the amortization of the excess acquisition price.

Event

General Journal

Debit

Credit

1

*Enter debits before credits

b.

Prepare all consolidation entries needed to prepare a full set of consolidated financial statements for 20X7. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Consolidation Worksheet Entries

Record the basic consolidation entry.

Record the amortized excess value reclassification entry.

Record the excess value (differential) reclassification entry.

Record the entry to eliminate the intercompany accounts.

Record the optional accumulated depreciation consolidation entry.

Event

Accounts

Debit

Credit

1

*Enter debits before credits

c.

Prepare a three-part consolidation worksheet as of December 31, 20X7. (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.)