On January 1, 2011 Company X acquired 80% of the common stock of Company Y for $200,000. On this date, Company Y had total owners' equity of $200,000 (including retained earnings of $ 100,000). During 2011 and 2012, Company X appropriately accounted for its investment in Company Y using the simple equity method. Any excess of cost over book value is attributable to investment (worth $12,500 more than cost), to equipment (worth $25,000 more than book value), and to goodwill. FIFO is used for inventories. The equipment has a remaining life of four years, and straight-line depreciation is used. On January 1, 2012, Company X held merchandise acquired from Company Y for $20,000. During 2012, Company Y sold merchandise to company X for $40,000, $10,000 of which was still held by Company X on December 31, 2012. Company Y usual gross profit is 50%. On January 1, 2011, Company X sold equipment to Company Y at a gain of $15,000. Depreciation is being computed using the straight -line method, a 5-year life, and no salvage value. The following trial balances were prepared for Company X and Company Y for December 31, 2012: Company X Company Y Inventory, December 31 ......................................................................................................................................... 130,000 50,000 Other Current Assets ............................................................................................................................................... 241,000 235,000 Investment in Company Y ........................................................................................................................................ 308,000 Other Long Term Investments ................................................................................................................................. 20,000 Land .......................................................................................................................................................................... 140,000 80,000 Buildings and Equipment .......................................................................................................................................... 375,000 200,000 Accumulated Depreciation ....................................................................................................................................... (120,000) (30,000) Other Intangible Assets ............................................................................................................................................ 20,000 Current Liabilities ..................................................................................................................................................... (150,000) (70,000) Bonds Payable .......................................................................................................................................................... (100,000) Other Long Term Liabilities ...................................................................................................................................... (200,000) (50,000) Common Stock ......................................................................................................................................................... (200,000) (50,000) Paid-In Capital in Excess of Par ................................................................................................................................. (100,000) (50,000) Retained Earnings, January 1, 2012 ......................................................................................................................... (320,000) (150,000) Sales .......................................................................................................................................................................... (600,000) (315,000) Cost of Goods Sold ................................................................................................................................................... 350,000 150,000 Operating Expenses .................................................................................................................................................. 150,000 60,000 Subsidiary Income .................................................................................................................................................... (84,000) Dividends Declared ............................................................................................................................................................. 60,000 20,000 Totals .................................................................................................................................................................................. 0 0 Prepare the necessary elimination and adjusting entries. Complete the worksheet for consolidated financial statements for the year ended December 31, 2012. Include the necessary determination and distribution of excess schedule and income distribution schedules.