On January 1, 2008, Vector Company acquired 80 percent of Scalar Company's ownership on for $120,000 cash. At that date, the fair value of the noncontrolling interest was $30,000. The book value of Scalar's net assets at acquisition was $125,000. The book values and fair values of Scalar's assets and liabilities were equal, except for buildings and equipment, which were worth $15,000 more than book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, the management of Vector concluded at December 31, 2008, that goodwill from its acquisition of Scalar shares had been impaired and the correct carrying amount was $5,000. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders. (Note that Vector Company does not adjust its Income from Subsidiary for goodwill impairment under the basic equity method.) No additional impairment occurred in 2009.

Trial balance data for Vector and Scalar on December 31, 2009, are as follows: Required:

Give all journal entries to be recorded assuming it uses the equity method in accounting

prepare consolidation entries needd to prepare a consolidated financial statements

Item Cash Accounts Receivable Inventory Land Buildings and Equipment Investment in Scalar Co. Stock Cost of Goods Sold Wage Expense Depreciation Expense Interest Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Wages Payable Notes Payable Common Stock Retained Earnings Sales Income from Subsidiary Vector Company Scalar Company Debit Credit Debit Credit $100,000 $30,000 25,000 60,000 30,000 80,000 50,000 150,000 300,000 150,000 148,800 180,000 100,000 34,000 50,000 30,000 15,000 25,000 6,000 40,000 21,000 40,000 10,000 $36,000 $150,000 90,000 26,000 30,800 9,000 180,000 50,000 100,000 150,000 185,000 50,000 400,000 200,000 18,000 $1,203,800 $1,203,800 $471,000 $471,000