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 the equity method to account for its investment in Philmore Wondersome assigned the acquisition-date AAP as follows: AAP Items PPE, net Patent Initial Fair Value $90,000 150.000 $240,000 Useful Life (years) 20 10 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: Transfer price for inventory sale Cost of goods sold Gross profit % inventory remaining Gross profit deferred 2022 $94,500 -64,500 $30,000 30% $9,000 2023 $70,000 -45.000 $25,000 20% $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 $2,400,000 -1.580.000 820,000 45,851 -711.200 $154,651 Philmore $602,400 - 465,398 137,002 Sales Cost of goods sold Gross Profit Income (loss) from subsidiary Operating expenses Net income -56,000 $81.002 BOY Retained Earnings Net income Dividends EOY Retained Earnings Statement of Retained Earnings Wondersome $3,500,000 154,651 -85.000 $3.569.651 Philmore $608,000 81,002 -15,000 $674,002 Balance Sheet Wondersome Philmore Assets: Cash Accounts receivable Inventory Equity Investment PPE, net $84,700 113,200 142,100 $450,000 425,000 654,000 803,251 4,438,400 $6,770.651 1.000,002 $1.340.002 Liabilities and Stockholders' Equity: Current Liabilities Long-term Liabilities Common Stock APIC Retained Earnings $505,900 703,500 402,000 1,589,600 3.569.651 $6,770,651 $99,500 250,000 75,300 241,200 674,002 $1,340.002 Required: a. Compute the EOY noncontrolling interest equity balance b. Prepare the consolidation journal entries. 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 the equity method to account for its investment in Philmore Wondersome assigned the acquisition-date AAP as follows: AAP Items PPE, net Patent Initial Fair Value $90,000 150.000 $240,000 Useful Life (years) 20 10 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: Transfer price for inventory sale Cost of goods sold Gross profit % inventory remaining Gross profit deferred 2022 $94,500 -64,500 $30,000 30% $9,000 2023 $70,000 -45.000 $25,000 20% $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 $2,400,000 -1.580.000 820,000 45,851 -711.200 $154,651 Philmore $602,400 - 465,398 137,002 Sales Cost of goods sold Gross Profit Income (loss) from subsidiary Operating expenses Net income -56,000 $81.002 BOY Retained Earnings Net income Dividends EOY Retained Earnings Statement of Retained Earnings Wondersome $3,500,000 154,651 -85.000 $3.569.651 Philmore $608,000 81,002 -15,000 $674,002 Balance Sheet Wondersome Philmore Assets: Cash Accounts receivable Inventory Equity Investment PPE, net $84,700 113,200 142,100 $450,000 425,000 654,000 803,251 4,438,400 $6,770.651 1.000,002 $1.340.002 Liabilities and Stockholders' Equity: Current Liabilities Long-term Liabilities Common Stock APIC Retained Earnings $505,900 703,500 402,000 1,589,600 3.569.651 $6,770,651 $99,500 250,000 75,300 241,200 674,002 $1,340.002 Required: a. Compute the EOY noncontrolling interest equity balance b. Prepare the consolidation journal entries