P7-32 Consolidation Worksheet in Year of Intercompany Transfer LO 7-4, 7-5 Prime Company holds 80 percent of Suspect Company's stock, acquired on January 1, 20X2, for $182,000. On the acquisition date the fair value of the noncontrolling interest was $45,500. Suspect reported retained earnings of $50,000 and had $100,000 of common stock outstanding. Prime uses the fully adjusted equity method in accounting for its investment in Suspect Trial balance data for the two companies on December 31, 20X6, are as follows: Prime Company Suspect Company Item Debit Credit Debit Canh Accounts Receivable Credit $ 125,000 $ 38,000 Tnventory 278,000 98,000 Land 70,000 Butidings quipment 85,000 560,000 130,000 Investment in Suspect Co. 232,570 Coat of Goods Sold Depreciation and Amortization Expanse 133,400 78,200 28,000 Other Expenses 13,000 Dividends Declared 17,000 7,000 recumulated Depreciation 30,000 5,000 Mecounts Payable $ 229,600 $ 39,000 Bonds Payable 57.000 17,000 170.000 Common Stock 35,000 Retained Earnings 300,000 100,000 144,860 93,200 Gain on sale of Equipment 230,000 170,000 Income from suspect Co. 14.500 20010 Total $1,473,970 $1,473,970 $454,200 5454,200 Sales Additional Information 1. At the date of combination, the book values and fair values of all separately identifiable assets and abilities of Suspect were the same. At December 31, 20X6, the management of Prime reviewed the amount attributed to goodwill as a result of its purchase of Suspect stock and concluded an impairment loss of $20,475 should be recognized in 20X6 and shared proportionately between Additional Information 1. At the date of combination, the book values and fair values of all separately identifiable assets and liabilities of Suspect were the same. At December 31, 20X6, the management of Prime reviewed the amount attributed to goodwill as a result of its purchase of Suspect stock and concluded an impairment loss of $20,475 should be recognized in 20x6 and shared proportionately between the controlling and noncontrolling shareholders. z. On January 1, 20x5, Suspect sold land that had cost $8,000 to Prime for $18,000. 3. On January 1, 20X6, Prime sold to Suspect equipment that it had purchased for $82,500 on January 1, 20X1. The equipment has a total economic life of 15 years and was sold to Suspect for $69,500. Both companies use straight-line depreciation 4. There was $5,500 of intercompany receivables and payables on December 31, 20x6. Required: a. Give all consolidation entries needed to prepare a consolidation worksheet for 20x6. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list Consolidation Worksheet Entries Record the basic consolidation entry Not inter debit before credits Entry Accounts Debit Credit ark Saved -- Sive all consolidation entries needed to prepare a consolidation worksheet nsaction/event, select "No journal entry required" in the first account field view transaction list Consolidation Worksheet Entries Record the basic consolidation entry Not inter debit before credits Entry Accounts Debit Credit ark Saved -- Sive all consolidation entries needed to prepare a consolidation worksheet nsaction/event, select "No journal entry required" in the first account field view transaction list Consolidation Worksheet Entries