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, 20X1, are as follows: Cash Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Investment in Saul Corporation Total Assets Cash Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Total Assets PENNY MANUFACTURING CORPORATION Balance Sheet January 1, 20X1 $ 238,500 Accounts Payable 76,000 Bonds Payable $ 119,250 394,000 100,000 Common Stock 185,000 608,000 Additional Paid-In Capital 35,000 (142,000) Retained Earnings 394,000 246,750 $1,127,250 Total Liabilities & Equities $1,127,250 SAUL CORPORATION Balance Sheet January 1, 20X1 $ 70,000 Accounts Payable $123,000 116,000 Bonds Payable 294,000 180,000 608,000 Common Stock ($10 par) 100,000 Additional Paid-In Capital 35,000 (228,000) Retained Earnings 194,000 $ 746,000 Total Liabilities & Equities $746,000 On January 2, 20X1, 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Answer is complete but not entirely correct. No Event A 1 Common stock Retained earnings Accounts Additional paid-in capital Investment in Saul Corporation NCI in NA of Saul Corporation Debit Credit 125,000 194,000 160,000 104,750 x 232,250 b. Prepare a consolidated balance sheet worksheet immediately following the issuance of additional shares to Penny. (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.) Answer is not complete. PENNY MANUFACTURING COMPANY AND SUBSIDIARY Consolidated Balance Sheet Worksheet January 1, 20X1 Consolidation Entries Penny Saul Corp. DR CR Consolidated Balance Sheet Assets Cash Accounts Receivable $ 238,500 x 70,000 76,000 116,000 $ 308,500 192,000 Inventory 100,000 108.000 x 208,000 Buildings and Equipment 608,000 608,000 1,216,000 Less: Accumulated Depreciation (142,000) (228,000) (370,000) Investment in Saul Corp. 104,750 (104,750) Total Assets $ 880,500 $ 674,000 S 0 $ 104,750 $ 1,440,750 Liabilities & Stockholders' Equity Accounts Payable $ 119,250 $123,000 $ 242,250 Bonds Payable 394,000 294,000 688,000 Common Stock 185,000 100,000 285,000 Additional Paid-In Capital 160,000 x 160,000 Retained Earnings 394,000 194.000 588,000 NCI in NA of Saul Corp. 232,250x 232,250 Total Liabilities & Stockholders' Equity $ 1,252,250 $ 711,000 S 0 $ 232,250 $ 2,195,500