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On January 1, 20X9, Zigma Company acquired 100 percent of Standard Company's common shares at underlying book value. Zigma uses the equity method in accounting

On January 1, 20X9, Zigma Company acquired 100 percent of Standard Company's common shares at underlying book value. Zigma uses the equity method in accounting for its ownership of Standard. On December 31, 20X9, the trial balances of the two companies are as follows:

Zigma Company Standard Company
Item Debit Credit Debit Credit
Current Assets 238,000 95,000
Depreciable Assets 300,000 170,000
Investment in Standard Company 100,000
Other Expenses 90,000 70,000
Depreciation Expense 30,000 17,000
Dividends Declared 32,000 10,000
Accumulated Depreciation 120,000 85,000
Current Liabilities 50,000 30,000
Long-Term Debt 120,000 50,000
Common Stock 100,000 50,000
Retained Earnings 175,000 35,000
Sales 200,000 112,000
Income from Standard Company 25,000
790,000 790,000 362,000 362,000

Required

a. Record equity method journal entries that was recorded by peery company during 20X9

b. Prepare the consolidation entries needed as of December 31, 20X9, to complete a consolidation worksheet.

c. Prepare a three-part consolidation ( with income statements, statements of retained earnings and balance sheets of both companies) as of December 31, 20X9

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