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 60,000 107,000 614,000 PENNY MANUFACTURING CORPORATION Balance Sheet January 1, 20X1 $ 240,500 Accounts Payable Bonds Payable Additional Paid-In Capital $ 120,750 387,000 Common Stock 194,000 44,000 (137,000) Retained Earnings 387,000 248,250 $1,132,750 Total Liabilities & Equities $1,132,750 SAUL CORPORATION Balance Sheet January 1, 20X1 $ 70,000 100,000 187,000 614,000 (231,000) Accounts Payable Bonds Payable Common Stock ($10 par) Additional Paid-In Capital Retained Earnings $ 740,000 Total Liabilities & Equities $122,000 287,000 100,000 44,000 187,000 $740,000 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 and correct. No Event A 1 Common stock Retained earnings Accounts Debit Credit 125,000 187,000 Additional paid-in capital Investment in Saul Corporation NCI in NA of Saul Corporation 169,000 384,800 96,200 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 $ 90,500 ( 220,000 $ 310,500 Accounts Receivable 60,000 100,000 160,000 Inventory 107,000 187,000 294,000 Buildings and Equipment 614,000 614,000 1,228,000 Less: Accumulated Depreciation (137,000) (231,000) (368,000) Investment in Saul Corp. 384,800 384,800 0 Total Assets $ 890,000 $ 0 $ 384,800 $ 1,624,500 1,119,300 Liabilities & Stockholders' Equity Accounts Payable $ 120,750 ( $ 122,000 Bonds Payable 387,000 287,000 $ 242,750 674,000 Common Stock 194,000 125,000 Additional Paid-In Capital 30,550 169,000 Retained Earnings 387,000 187,000 187,000 69,000 (138,450) 387,000 NCI in NA of Saul Corp. 96,200 96,200 Total Liabilities & Stockholders' Equity $ $ 596,000 $ 481,000 $ 96,200 $ 1,330,500 1,119,300