On January 1, 20X5, Pond 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 Pond and Skate at January 1, 20X8, and December 31, 20X8, and income statements for 20X8 were reported as follows:

	20X8 Balance Sheets
	Pond Corporation								Skate Company
	January 1				December 31				January 1				December 31
Assets
Cash	$	74,600			$	70,100			$	23,000			$	64,000
Accounts Receivable		149,000				195,000				77,000				82,000
Interest & Other Receivables		45,000				50,000				13,000				15,000
Inventory		117,000				157,000				62,000				62,000
Land		69,000				69,000				23,000				23,000
Buildings & Equipment		403,000				403,000				253,000				253,000
Accumulated Depreciation		(131,000	)			(166,000	)			(69,000	)			(93,000	)
Investment in Skate Company:
Stock		129,030				145,980
Bonds		36,400				36,000
Investment in Tin Co. Bonds		130,000				129,000
Total Assets	$	1,022,030			$	1,089,080			$	382,000			$	406,000
Liabilities & Equities
Accounts Payable	$	205,530			$	144,800			$	117,000			$	79,500
Interest & Other Payables		35,000				40,000				6,000				11,000
Bonds Payable		284,000				284,000				84,000				84,000
Bond Discount										(4,000	)			(3,500	)
Common Stock		139,000				139,000				25,000				25,000
Additional Paid-In Capital		144,000				144,000				11,000				11,000
Retained Earnings		214,500				337,280				143,000				199,000
Total Liabilities & Equities	$	1,022,030			$	1,089,080			$	382,000			$	406,000

	20X8 Income Statements
	Pond Corporation										Skate Company
Sales						$	464,000								$	264,000
Income from Skate Co.							51,180
Interest Income							27,500
Total Revenue						$	542,680								$	264,000
Cost of Goods Sold		$	279,000								$	118,000
Other Operating Expenses			49,000									39,000
Depreciation Expense			34,000									23,000
Interest Expense			23,000									9,500
Miscellaneous Expenses		$	11,900			$	396,900				$	9,500			$	199,000
Net Income						$	145,780								$	65,000

Additional Information

Pond sold a building to Skate for $73,000 on December 31, 20X7. Pond had purchased the building for $133,000 and was depreciating it on a straight-line basis over 25 years. At the time of sale, Pond reported accumulated depreciation of $79,800 and a remaining life of 10 years. Assume Pond uses the fully adjusted equity method.

On July 1, 20X6, Skate sold land that it had purchased for $29,000 to Pond for $42,000. Pond is planning to build a new warehouse on the property prior to the end of 20X9.

Skate issued $84,000, par value 10-year bonds with a coupon rate of 10 percent on January 1, 20X5, at $79,000. On December 31, 20X7, Pond purchased $33,600 par value of Skates bonds for $36,400. Both companies amortize bond premiums and discounts on a straight-line basis. Interest payments are made on July 1 and January 1.

Pond and Skate paid dividends of $23,000 and $9,000, 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.)