On January 1, 20X8, Pierce Corporation acquired 90 percent of Sharp Company's voting stock, at underlying book value. The fair value of the noncontrolling interest was equal to 10 percent of the book value of Sharp at that date. Pierce uses the equity method in accounting for its ownership of Sharp. On December 31, 20X8, the trial balances of the two companies are as follows:

Pierce Company Sharp Company

	DR	CR	DR	CR
Current Assets	200000		120000
Depreciable Assets	300000		225000
Investment in Sharp	139500
Dividends Declared	30000		10,000
Accumulated Depreciation		120000		75000
Current Liabilities		62000		25000
Long-Term Debt		75000		90000
Common Stock		100000		75000
Retained Earnings		120000		65000
Income		170,000		25,000
Income from Subsidiary		22500
Totals	669,500	669,500	355,000	355,000

Required:

A. Provide all consolidating entries required as of December 31, 20X8, to prepare consolidated financial statements.

B. Compute retained earning balance of Pierce and Sharp corporation at the end of the year.

C. Prepare a consolidation balance sheet.