• On January 1, 2016, Alpha acquired 80 percent of Delta. Of Delta's total business fair value, $217,000 was allocated to copyrights with a 20-year remaining life. Subsequently, on January 1, 2017, Delta obtained 70 percent of Omega's outstanding voting shares. In this second acquisition, $171,600 of Omega's total business fair value was assigned to copyrights that had a remaining life of 12 years. Delta's book value was $577,500 on January 1, 2016 and Omega reported a book value of $179,500 on January 1, 2017.

  Delta has made numerous inventory transfers to Alpha since the business combination was formed. Intra-entity gross profits of $22,800 were present in Alpha's inventory as of January 1, 2018. During the year, $214,000 in additional intra-entity sales were made with $23,540 in Intra-entity gross profits in inventory remaining at the end of the period.

  Both Alpha and Delta utilized the partial equity method to account for their investment balances.

  Following are the individual financial statements for the companies for 2018 with consolidated totals.

  	Alpha Company				Delta Company				Omega Company				Consolidated Totals
  Sales	$	(958,000	)		$	(669,110	)		$	(245,700	)		$	(1,658,810	)
  Cost of goods sold		522,000				265,000				84,000				657,740
  Operating expenses		327,000				185,000				89,000				626,150
  Income of subsidiary		(216,000	)			(50,890	)			0				0
  Separate company net income	$	(325,000	)		$	(270,000	)		$	(72,700	)
  Consolidated net income													$	(374,920	)
  Net income attributable to noncontrolling interest (Delta Company)														49,680
  Net income attributable to noncontrolling interest (Omega Company)														17,520
  Net income attributable to Alpha Company													$	(307,720	)
  Retained earnings, 1/1/18	$	(672,500	)		$	(487,500	)		$	(139,500	)		$	(628,892	)
  Net income (above)		(325,000	)			(270,000	)			(72,700	)			(307,720	)
  Dividends declared		50,000				40,000				50,000				50,000
  Retained earnings, 12/31/18	$	(947,500	)		$	(717,500	)		$	(162,200	)		$	(886,612	)
  Cash and receivables	$	168,900			$	183,840			$	30,200			$	382,940
  Inventory		308,000				337,500				242,000				863,960
  Investment in Delta Company		843,600				0				0				0
  Investment in Omega Company		0				303,660				0				0
  Property, plant, and equipment		462,000				560,000				306,000				1,328,000
  Copyrights		0				0				0				327,450
  Total assets	$	1,782,500			$	1,385,000			$	578,200			$	2,902,350
  Liabilities	$	(635,000	)		$	(547,500	)		$	(316,000	)		$	(1,498,500	)
  Common stock		(200,000	)			(120,000	)			(100,000	)			(200,000	)
  Retained earnings, 12/31/18		(947,500	)			(717,500	)			(162,200	)			(886,612	)
  Noncontrolling interest in Delta Company, 12/31/18		0				0				0				(195,678	)
  Noncontrolling interest in Omega Company, 12/31/18		0				0				0				(121,560	)
  Total liabilities and equities	$	(1,782,500	)		$	(1,385,000	)		$	(578,200	)		$	(2,902,350	)

• Prepare Entry *G to recognize the intra-entity gross profit in inventory in 2017.

• 2

  Prepare Entry *C1 to recognize amortization expense from Dela's acquisition for 2017.

• 3

  Prepare Entry *C2 to To recognize accrual adjustments for excess amortization and inventory deferral.

• 4

  Prepare Entry S1 to eliminate the stockholders' equity accounts of Omega against the parent's investment account and to recognize the outside ownership.

• 5

  Prepare Entry S2 to eliminate the stockholders' equity accounts of Delta against the corresponding balance in the investment account and to recognize the outside ownership.

• 6

  Prepare Entry A to recognize the January 1, 2018 unamortized copyrights.

• 7

  Prepare Entry I1 to eliminate the intra-entity income accrual found on Alpha's records.

• 8

  Prepare Entry I2 to eliminate the intra-entity income accrual found on Delta's records.

• 9

  Prepare Entry D1 to eliminate the intra entity dividends for Delta.

• 10

  Prepare Entry D2 to eliminate the intra entity dividends for Omega.

• 11

  Prepare Entry E to recognize the current year amortization on copyrights.

• 12

  Prepare Entry TI to eliminate the intra-entity inventory transfer.

• 13

  Prepare Entry G to defer the ending intra-entity gross profit on the intra-entity transfers.