On January 1, 20X5, Johnson Corporation purchased 75 percent of Skate Companys stock at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 25 percent of Skates book value. The balance sheets for Johnson and Skate at January 1, 20X8, and December 31, 20X8, and income statements for 20X8 were reported as follows:

	20X8 Balance Sheets
	Johnson Corporation								Skate Company
	January 1				December 31				January 1				December 31
Assets
Cash	$	71,600			$	67,100			$	24,000			$	61,000
Accounts Receivable		141,000				187,000				66,000				71,000
Interest & Other Receivables		43,000				48,000				11,000				13,000
Inventory		106,000				146,000				68,000				68,000
Land		56,000				56,000				25,000				25,000
Buildings & Equipment		419,000				419,000				258,000				258,000
Accumulated Depreciation		(140,000	)			(175,000	)			(70,000	)			(94,000	)
Investment in Skate Company:
Stock		140,730				157,680
Bonds		36,000				35,600
Investment in Tin Co. Bonds		132,000				131,000
Total Assets	$	1,005,330			$	1,072,380			$	382,000			$	402,000
Liabilities & Equities
Accounts Payable	$	211,830			$	132,900			$	112,500			$	64,000
Interest & Other Payables		33,000				38,000				7,000				12,000
Bonds Payable		283,000				283,000				83,000				83,000
Bond Discount										(4,500	)			(4,000	)
Common Stock		135,000				135,000				24,000				24,000
Additional Paid-In Capital		140,000				140,000				10,000				10,000
Retained Earnings		202,500				343,480				150,000				213,000
Total Liabilities & Equities	$	1,005,330			$	1,072,380			$	382,000			$	402,000

	20X8 Income Statements
	Johnson Corporation										Skate Company
Sales						$	464,000								$	264,000
Income from Skate Co.							55,380
Interest Income							28,500
Total Revenue						$	547,880								$	264,000
Cost of Goods Sold		$	275,000								$	126,000
Other Operating Expenses			45,000									35,000
Depreciation Expense			30,000									19,000
Interest Expense			19,000									5,500
Miscellaneous Expenses		$	9,900			$	378,900				$	7,500			$	193,000
Net Income						$	168,980								$	71,000

Additional Information

1. Johnson sold a building to Skate for $68,000 on December 31, 20X7. Johnson had purchased the building for $128,000 and was depreciating it on a straight-line basis over 25 years. At the time of sale, Johnson reported accumulated depreciation of $76,800 and a remaining life of 10 years. Assume Johnson uses the fully adjusted equity method.
2. On July 1, 20X6, Skate sold land that it had purchased for $31,000 to Johnson for $44,000. Johnson is planning to build a new warehouse on the property prior to the end of 20X9.
3. Skate issued $83,000, par value 10-year bonds with a coupon rate of 10 percent on January 1, 20X5, at $78,000. On December 31, 20X7, Johnson purchased $33,200 par value of Skates bonds for $36,000. Both companies amortize bond premiums and discounts on a straight-line basis. Interest payments are made on July 1 and January 1.
4. Johnson and Skate paid dividends of $28,000 and $8,000, respectively, in 20X8.

Required: a. Prepare all consolidation entries needed at December 31, 20X8, to complete a three-part consolidation worksheet. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) b. Prepare a three-part worksheet for 20X8 in good form. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.