Penny Manufacturing Company acquired $75$ percent of Saul Corporation stock at underlying book value. At the date of acquisition, the fair value of the noncontrolling interest was equal to $25$ percent of Saul's book value. The balance sheets of the two companies for January $1,20$X$1,$ are as follows:

Cash

Accounts Receivable

Inventory

Buildings and Equipment

Less: Accumulated Depreciation Investment in Saul Corporation

Total Assets

Cash

Accounts Receivable

Inventory

Buildings and Equipment

Less: Accumulated Depreciation

Total Assets

PENNY MANUFACTURING COMPANY

Balance Sheet

January $1,20$X$1$

$ $245,500$

Accounts Payable

$74,000$

Bonds Payable

$101,000$

Common Stock

$602,000$

Additional Paid$-$In Capital

$(147,000)$

Retained Earnings

$246,000$

$ $1,121,500$

Total Liabilities and Equities

SAUL CORPORATION

Balance Sheet

January $1,20$X$1$

$ $78,000$ Accounts Payable

$114,000$ Bonds Payable

$181,000$ Common Stock $($$$10$ par$)$

$602,000$ Additional Paid$-$In Capital

$(228,000)$ Retained Earnings

$ $747,000$ Total Liabilities and Equities

$ $3\mathrm{.}2,000$

$136,000$

$392,000$

$ $1,121,500$

$ $222,000$

$100,000$

$36,000$

$192,000$

$ $747,000$

On January $2,20$X$1,$ Penny purchased an additional $2,500$ shares of common stock directly from Saul for $$150,000.$

Required:

a$.$ Prepare the consolidation entry needed to complete a consolidated balance sheet worksheet immediately following the issuance of additional shares to Penny.

b$.$ Prepare a consolidated balance sheet worksheet immediately following the issuance of additional shares to Penny.additional shares to Penny.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.

Journal entry worksheet

A

Record the basic consolidation entry.

Note: Enter debits before credits.