Penn Corporation purchased 80 percent ownership of State Company on January 1, 20X2, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of State. On January 1, 20X4, Penn sold 2,000 shares of State's stock for $75,000 to Nonaffiliated Company and recorded a $19,000 increase in additional paid-in capital. Trial balances for the companies on December 31, 20X4, contain the following data: State Company Debit Credit $ 40,000 55,000 108,000 280,000 Cash Accounts Receivable Inventory Buildings & Equipment Investment in State Company Cost of Goods Sold Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock ($10 par) Additional Paid-In Capital Retained Earnings Sales Income from State Total Penn Corporation Debit Credit $ 35,000 75,000 128,000 690,000 163,200 208,000 21,000 22,000 23,000 $ 169,000 151,800 170,000 200,000 70,000 305,000 276,000 23,400 $1,365,200 $1,365,200 98,000 16,000 26,000 18,000 $ 94,000 93,000 24,000 100,000 21,000 130,000 179,000 $641,000 $641,000 State's net income was earned evenly throughout the year. Both companies declared and paid their dividends on December 31, 20X4. Penn uses the equity method in accounting for its investment in State. Required: a. Prepare the consolidation entries needed to complete a worksheet for 20X4. (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 A > Record the basic consolidation entry. Note: Enter debits before credits. Event Accounts Debit Credit 1 100,000 21,000 130,000 23,400 Common stock Additional paid-in capital Retained earnings Income from State Company INCI in NI of State Company Dividends declared Investment in State Company INCI in NA of State Company 18,000 163,200 Record entry Clear entry view consolidation entries Consolidated 0 0 PENN CORPORATION AND SUBSIDIARY Consolidated Financial Statement Worksheet December 31, 20X4 Consolidation Entries Penn Corp. State Co. DR CR Income Statement Sales Less: COGS Less: Depreciation Expense Less: Other Expenses Income from State Co. Consolidated Net Income 0 0 0 0 NCI in Net Income Controlling Interest in NI 0 0 0 0 Statement of Retained Earnings Beginning Balance Net Income Less: Dividends Declared Ending Balance 0 0 0 0 Balance Sheet Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Investment in State Co. Total Assets 0 Accounts Payable Bonds Payable Common Stock Additional Paid-In Capital Retained Earnings NCI in NA of State Co. Total Liabilities & Equity 0 0 0 0 0 0