Palermo Incorporated purchased $80$ percent of the outstanding stock of Salina Ranching Company, located in Australia, on January $1,20$X$3.$ The purchase price in Australian dollars $($A$$)$ was A$$200,000,$ and A$$40,000$ of the differential was allocated to plant and equipment, which is amortized over a $10-$year period. The remainder of the differential was attributable to a patent. Palermo Incorporated amortizes the patent over $10$ years. A trial balance translated to U$.$ S$.$ dollars for Salina Ranching is as follows:

Salina Ranching Company

Trial Balance Translated

December $31,20$X$3$

Australian Dollars Exchanges Rate U$.$S$.$ Dollars

Cash A$ $44,1000\mathrm{.}60$ $ $26,460$

Accounts Receivable $($net$)72,0000\mathrm{.}6043,200$

Inventory $86,0000\mathrm{.}6051,600$

Plant and Equipment $240,0000\mathrm{.}60144,000$

Cost of Goods Sold $330,0000\mathrm{.}65214,500$

Depreciation Expense $24,0000\mathrm{.}6515,600$

Operating Expenses $131,5000\mathrm{.}6585,475$

Interest Expense $5,7000\mathrm{.}653,705$

Dividends Declared $9,0000\mathrm{.}676,030$

Total $ $590,570$

Accumulated other comprehensive

Income $-$ Translation Adjustment$($debit$)16,760$

Total Debits A$ $942,300$ $ $607,330$

Accumulated Depreciation A$ $60,0000\mathrm{.}60$ $ $36,000$

Accounts Payable $53,8000\mathrm{.}6032,280$

Payable to Palermo Incorporated $10,8000\mathrm{.}606,480$

Interest Payable $3,0000\mathrm{.}601,800$

$12\%$ Bonds Payable $100,0000\mathrm{.}6060,000$

Premium on Bonds $5,7000\mathrm{.}603,420$

Common Stock $90,0000\mathrm{.}7063,000$

Retained Earnings $40,0000\mathrm{.}7028,000$

Sales $579,0000\mathrm{.}65376,350$

Total Credits A$ $942,300$ A$ $607,330$

Assume that the Australian dollar $($A$$)$ is the functional currency and that Palermo uses the fully adjusted equity method for accounting for its investment in Salina Ranching. A December $31,20$X$3,$ trial balance for Palermo Incorporated follows. Use this translated trial balance for completing this problem.

Item Debit Credit

Cash $ $38,000$

Accounts Receivable $($net$)140,000$

Receivable from Salina Ranching $6,480$

Inventory $128,000$

Plant and Equipment $500,000$

Investment in Salina Ranching $152,064$

Cost of Goods Sold $600,000$

Depreciation Expense $28,000$

Operating Expenses $204,000$

Interest Expense $2,000$

Dividends Declared $50,000$

Translation Adjustment $22,528$

Accumulated Depreciation $ $90,000$

Accounts Payable $60,000$

Interest Payable $2,000$

Common Stock $500,000$

Retained Earnings, January $1,20$X$3179,656$

Sales $1,000,000$

Income from Subsidiary $39,416$

Total $ $1,871,072$ $ $1,871,072$

Required:

Prepare a set of consolidating entries, in general journal form, for the entries required to prepare a comprehensive consolidation worksheet $($including other comprehensive income$)$ as of December $31,20$X$3.$

Prepare a comprehensive consolidation worksheet as of December $31,20$X$3.$