On January 2, 2017, Palace Shoes acquired 60% of the stock of Sage Footwear. Palace uses the complete equity method to account for its investment in Sage.

Sages assets and liabilities were reported at amounts approximating fair value, except for previously unreported indefinite life identifiable intangible assets valued at $10,000. These intangible assets were impaired by $2,000 during the years 2017-2019 and are impaired by $500 during 2020.

The goodwill recognized for this acquisition was $56,500, split between Palace and the noncontrolling interest in a 70:30 ratio. There has been no goodwill impairment during 2017-2019, but testing reveals goodwill impairment of $1,500 in 2020.

Sage sells merchandise to Palace (upstream sales) on a regular basis at a 25% markup on cost. Information on sales activities is as follows:

Sales price of merchandise sold to Palace in 2020	$18,000
Merchandise in Palaces 2020 beginning inventory, purchased from Sage, at cost to Palace	1,000
Merchandise in Palaces 2020 ending inventory, purchased from Sage, at cost to Palace	1,500

It is now December 31, 2020, four years since the acquisition. The December 31, 2020 trial balances of Palace and Sage appear in the consolidation working paper below.

Required

Fill in the working paper above to consolidate the December 31, 2020 trial balances of Palace and Sage. Label the eliminating entries (E), (R), (C), (O), (N) and ( I).

	Palace Dr (Cr)	Sage Dr (Cr)	Dr	Cr	Consol Dr (Cr)
Current assets	$ 10,000	$ 3,000
Plant assets, net	300,000	85,000
Intangibles
Investment in Sage	54,550
Goodwill
Liabilities	(158,755)	(68,450)
Capital stock	(80,000)	(7,500)
Retained earnings, beg.	(120,000)	(8,000)
AOCI, beg.	(1,000)	(500)
Noncontrolling interest
Sales revenue	(125,000)	(50,000)
Equity in NI of Sage	(690)
Cost of goods sold	80,000	30,000
Operating expenses	41,000	16,500
OCI	(75)	(50)
Equity in Sages OCI	(30)
NCI in net income
NCI in OCI
Total	$ 0	$ 0