Park Corporation paid $24,800 for an 80% interest in Stay Corporation on January 1, 2019, at which time Stay's stockholders' equity consisted of $15,000 of Common Stock and $6,000 of Retained Earnings. The fair values of Stay Corporation's assets and liabilities were identical to recorded book values when Park acquired its 80% interest.

Stay Corporation reported net income of $4,000 and paid dividends of $2,000 during 2019.

Park Corporation sold inventory items to Stay during 2019 and 2020 as follows:

2019 2020

Park's sales to Stay $5,000 $6,000

Park's cost of sales to Stay 3,000 3,500

Unrealized profit at year-end 1,000 1,500

At December 31, 2020, the accounts payable of Stay include $1,500 owed to Park for inventory purchases.

Required:

1) Prepare all elimination entries in 2020 (Including the entries not affecting the consolidated Income statement). Show all your calculations.

2) Complete the working papers to consolidate the financial statements of Park Corporation and subsidiary for the year ended December 31, 2020.

Consolidated Park Stay Eliminations Debit Credit INCOME STATEMENT Sales $43,000 $20,000 income from Stay 6,700 Cost of Sales -22,000 -8,000 Other Expenses -12,200 -3,000 Noncontrolling interest share Net income $15,500 $9,000 Retained Earnings 1/1 $9,000 $8,000 Add: Net income 15,500 9,000 Dividends - 10,000 -5,000 Retained Earnings 12/31 $14,500 $12,000 BALANCE SHEET Cash $5,400 $3,000 Net Receivables 14,000 10,000 Dividends Receivable 2,000 Inventories 18,000 8,000 Goodwill Plant assets-net 24,000 31,000 Investment in Stay 28,100 TOTAL ASSETS $91,500 $52,000 LIAB. & EQUITY Accounts payable $17,500 $12,500 Dividends payable 7,000 2,500 Other Debt 12,500 10,000 Capital Stock 40,000 15,000 Retained Earnings 14,500 12,000 1/1 Noncntrl. Interest 12/31 Noncntrl. Interest TOTAL LIAB. & EQUITIES $91,500 $52,000