On January 1, 2016, Alpha acquired 80 percent of Delta. Of Delta's total business fair value, $224,000 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, $148,200 of Omega's total business fair value was assigned to copyrights that had a remaining life of 12 years. Delta's book value was $585,000 on January 1, 2016 and Omega reported a book value of $181,500 on January 1, 2017.

Delta has made numerous inventory transfers to Alpha since the business combination was formed. Intra-entity gross profits of $16,000 were present in Alpha's inventory as of January 1, 2018. During the year, $274,000 in additional intra-entity sales were made with $30,140 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	$	(998,200	)		$	(682,100	)		$	(285,000	)		$	(1,691,300	)
Cost of goods sold		555,000				299,000				131,000				725,140
Operating expenses		335,000				171,000				77,000				606,550
Income of subsidiary		(212,800	)			(53,900	)			0				0
Separate company net income	$	(321,000	)		$	(266,000	)		$	(77,000	)
Consolidated net income													$	(359,610	)
Net income attributable to noncontrolling interest (Delta Company)														46,403
Net income attributable to noncontrolling interest (Omega Company)														19,395
Net income attributable to Alpha Company													$	(293,812	)
Retained earnings, 1/1/18	$	(642,500	)		$	(495,000	)		$	(141,500	)		$	(604,864	)
Net income (above)		(321,000	)			(266,000	)			(77,000	)			(293,812	)
Dividends declared		50,000				40,000				60,000				50,000
Retained earnings, 12/31/18	$	(913,500	)		$	(721,000	)		$	(158,500	)		$	(848,676	)
Cash and receivables	$	239,000			$	493,810			$	69,500			$	802,310
Inventory		316,000				382,500				206,000				874,360
Investment in Delta Company		852,000				0				0				0
Investment in Omega Company		0				284,690				0				0
Property, plant, and equipment		499,000				330,000				336,000				1,165,000
Copyrights		0				0				0				313,900
Total assets	$	1,906,000			$	1,491,000			$	611,500			$	3,155,570
Liabilities	$	(792,500	)		$	(650,000	)		$	(353,000	)		$	(1,795,500	)
Common stock		(200,000	)			(120,000	)			(100,000	)			(200,000	)
Retained earnings, 12/31/18		(913,500	)			(721,000	)			(158,500	)			(848,676	)
Noncontrolling interest in Delta Company, 12/31/18		0				0				0				(196,794	)
Noncontrolling interest in Omega Company, 12/31/18		0				0				0				(114,600	)
Total liabilities and equities	$	(1,906,000	)		$	(1,491,000	)		$	(611,500	)		$	(3,155,570	)

Develop the worksheet entries necessary to derive these reported balances: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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

Note: Enter debits before credits.

Transaction	Accounts	Debit	Credit
1

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

Note: Enter debits before credits.

Transaction	Accounts	Debit	Credit
2

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

Note: Enter debits before credits.

Transaction	Accounts	Debit	Credit
3

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

Note: Enter debits before credits.

Transaction	Accounts	Debit	Credit
4

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.

Note: Enter debits before credits.

Transaction	Accounts	Debit	Credit
5

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

Note: Enter debits before credits.

Transaction	Accounts	Debit	Credit
6

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

Note: Enter debits before credits.

Transaction	Accounts	Debit	Credit
7

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

Note: Enter debits before credits.

Transaction	Accounts	Debit	Credit
8

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

Note: Enter debits before credits.

Transaction	Accounts	Debit	Credit
9

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

Note: Enter debits before credits.

Transaction	Accounts	Debit	Credit
10

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

Note: Enter debits before credits.

Transaction	Accounts	Debit	Credit
11

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

Note: Enter debits before credits.

Transaction	Accounts	Debit	Credit
12

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

Note: Enter debits before credits.

Transaction	Accounts	Debit	Credit
13