Patio Corporation owns 60 percent of the stock of Stone Container Company, which it acquired at book value in 20X1. At that date, the fair value of the noncontrolling interest was equal to 40 percent of Stones book value. On December 31, 20X3, Patio purchased $190,000 par value of Stone bonds. Stone originally issued the bonds at par value. The bonds coupon rate is 8 percent. Interest is paid semiannually on June 30 and December 31. Trial balances for the two companies on December 31, 20X4, are as follows:

	Patio Corporation											Stone Container Company
Item	Debit					Credit						Debit				Credit
Cash		$	61,700									$	20,000
Accounts Receivable			106,000										82,000
Inventory			120,000										120,000
Other Assets			335,000										325,000
Investment in Stone Container Bonds			196,000
Investment in Stone Container Stock			179,400
Interest Expense			24,000										22,000
Other Expenses			369,000										188,000
Dividends Declared			49,000										13,000
Accounts Payable							$	222,700									$	62,000
Bonds Payable								180,000										180,000
Common Stock								280,000										110,000
Retained Earnings								185,000										62,000
Sales								470,000										356,000
Interest Income								14,200
Income from Stone Container Company								88,200
Total		$	1,440,100				$	1,440,100				$	770,000				$	770,000

All interest income recognized by Patio is related to its investment in Stone bonds. Assume Patio uses the fully adjusted equity method. Required: a. Prepare a consolidation worksheet for 20X4 in good form. (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.)

b. Prepare a consolidated balance sheet, income statement, and retained earnings statement for 20X4.