On January 1, 2020, Wondersome Company acquired a 70% interest in Philmore Company for a purchase price that was $240,000 over the book value of the Philmore's Stockholders' Equity on the acquisition date. Wondersome uses theequity methodto account for its investment in Philmore. Wondersome assigned the acquisition-date AAP as follows:

AAP Initial FV Useful Life (in years)

PPE, net $90,000 20

Patent $50,000 10

$240,000

Philmore sells inventory to Wondersome (upstream) which includes that inventory in products that it, ultimately, sells to customers outside of the controlled group. You have compiled the following data for the years ending 2022 and 2023:

2022 2023

Transfer price, Inventory sale $94,500 $70,000

COGS -64,500 -45,000

Gross Profit $30,000 $25,000

% inventory remain 30% 20%

GP deferred $9,000 $5,000

EOY Receivable/Payable $32,000 $29,500

The inventory not remaining at the end of the year has been sold outside of the controlled group.

The parent and the subsidiary report the following financial statements at December 31, 2023:

Income Statement

Wondersome Philmore

Sales 2,400,00 602,400

COGS -1,580,000 -465,398

Gross Profit 820,000 137,002

Income (loss) from sub. 45,851

Operating expenses -711,200 -56,000

Net income $154,651 $81,002

Statement of Retained Earnings

Wondersome Philmore

BOY Retained earnings 3,500,000 608,000

Net income 154,65 181,002

Dividends -85,000 -15,000

EOY Retained earnings $3,569,651 $674,002

Balance Sheet

Wondersome Philmore

Assets:

Cash 450,000 84,700

Accounts receivable 425,000 113,200

Inventory 654,000 142,100

Equity investment 803,251

PPE, net 4,438,400 1,000,002

TOTAL Assets $6,770,651 $1,340,002

Liabilities & Stockholders' Equity:

Current liabilities 505,900 99,500

Long-term liabilities 703,500 250,00

Common stock 402,000 75,300

APIC 1,589,600 241,200

Retained earnings 3,569,651 674,002

TOTAL L & SE $6,770,651 $1,340,002

Required:

1. Compute the EOY noncontrolling interest equity balance
2. Prepare the consolidation journal entries.