Pillow Corporation acquired 80 percent ownership of Sheet Company on January 1, 20X7, for $173,000. At that date, the fair value of the noncontroling interest was $43,250 The trial balances for the two companies on December 31, 20X8, included the following amounts: Pillou Corporation Debit 59,000 83,000 275,000 B0,000 500,000 Sheet Company Debit $ 31,000 Credit Credit Item Cash Accounts Receivable Inventory 71,000 118,000 30,000 150,000 Land Buildings & Equipment Investment in Sheet Company Cost of Goods Sold 206, 200 498,000 25,000 310,000 15, 8 Depreciation Expense other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Mortgages Payable Common Stock 62,000 45,000 100,000 25,000 $ 180,000 $ 90,000 30,000 70,000 50,000 86,000 200,000 300,000 Retained Earnings 385,000 650,000 24,200 140,000 Sales 470,000 Income from Sheet Company $1,825,200 $1,825,200 $850,000 $850,000 Additional Information 1. On January 1, 20X7, Sheet reported net assets with a book value of $150,000 and a fair value of $191,250. Goodwill of $25.000 was recorded at the acquisition. Accumulated depreciation on buildings and equipment was $60,000 on the acquisition date. Sheet's depreciable assets had an estimated economic life of 11 years on the date of combination. 2. At December 31, 20x8, Pillow'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. Pillow used the equity method in accounting for its investment in Sheet 4. Detailed analysis of receivables and payables showed that Pillow owed Sheet $9,000 on December 31, 20X8. 5. Assume that the Investment in Sheet Company at 1/1/X8 is $202,000. Required: a. Prepare all journal entries recorded by Pillow with regard to its investment in Sheet during 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) b. Prepare all consolidation entries needed to prepare a full set of consolidated financial statements for 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) c. Prepare a three-part consolidation worksheet as of December 31, 20X8. (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.)