P5-34 Comprehensive Problem: Differential Apportionment in Subsequent Period This problem is a continuation of P5-35. Mortar Corporation acquired 80 percent ownership of Granite Company on January 1, 20X7. for $173.000. At that date, the fair value of the noncon- trolling interest was $43.250. The trial balances for the two companies on December 31, 20X8. included the following amounts: Item Granite Company Credit Debit $ Cash Accounts Receivable Inventory Land Buildings & Equipment Investment in Granite Company Stock Cost of Goods Sold Depreciation Expense Other Expenses Dividends Declared Mortar Corporation Debit Credit 59,000 83,000 275,000 80,000 500,000 206.200 490,000 25.000 62,000 45,000 $ 31,000 71,000 118,000 30,000 150,000 310,000 15,000 100,000 25,000 frontinued Chapter 5 Consolidation of Less-than-Wholly-Owned Subsidiaries Acquired at More than Book Value 245 Accumulated Depreciation Accounts Payable Mortgages Payable Common Stock Retained Earnings Sales Income from Subsidiary $ 180,000 86,000 200,000 300,000 385,000 650,000 24,200 $1,825,200 $ 90,000 30,000 70,000 50,000 140,000 470,000 $1,825,200 $850,000 $850,000 Additional Information 1. On January 1, 20X7, Granite reported net assets with a book value of $150,000 and a fair value of $191,250. The difference between fair value and book value of Granite's net assets is related entirely to Buildings and Equipment. Granite's depreciable assets had an estimated economic life of 11 years on the date of combination. 2. At December 31, 20X8, Mortar's management reviewed the amount attributed to goodwill and concluded goodwill was impaired and should be reduced to $14,000. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders. 3. Mortar used the equity method in accounting for its investment in Granite. 4. Detailed analysis of receivables and payables showed that Mortar owed Granite $9,000 on December 31, 20X8. Required a. Give all journal entries recorded by Mortar with regard to its investment in Granite during 20X8. b. Give all elimination entries needed to prepare a full set of consolidated financial statements for 20X8. c. Prepare a three-part consolidation worksheet as of December 31, 20X8