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 Philmores 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	Initial Fair Value	Useful Life (years)
PPE, net	$90,000	20
Patent	150,000	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 for inventory sale	$94,500	$70,000
Cost of goods sold	-64,500	-45,000
Gross profit	$30,000	$25,000
% inventory remaining	30%	20%
Gross profit 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	$2,400,000	$602,400
Cost of goods sold	-1,580,000	-465,398
Gross Profit	820,000	137,002
Income (loss) from subsidiary	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	154,651	81,002
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
	$6,770,651	$1,340,002
Liabilities and Stockholders Equity:
Current Liabilities	$505,900	$99,500
Long-term Liabilities	703,500	250,000
Common Stock	402,000	75,300
APIC	1,589,600	241,200
Retained Earnings	3,569,651	674,002
	$6,770,651	$1,340,002

Required: a. Compute the EOY noncontrolling interest equity balance b. Prepare the consolidation journal entries.