Perez Corporation acquired 75 percent of Santana Company's ownership on January 1, 2020, for $192,000. At that date, the fair value of the non-controlling interest was $64,000. The book value of Slice's net assets at acquisition was $200,000. The book values and fair values of Santanas assets and liabilities were equal, except for

1. buildings and equipment, which were worth $40,000 more than book value.

2. inventory, which was worth $12,000 less than book value.

3. land, which was worth $4,000 more than book value.

4. establishing the $6,000 fair value of an internally developed copyright.

Buildings and equipment are depreciated on a 5-year basis. The copyright has an indefinite life.

Although goodwill is not amortized, the management of Perez concluded at December 31, 2020, that goodwill from its purchase of Santanas shares had been impaired and the correct carrying amount was $8,000. Goodwill and goodwill impairment were assigned proportionately to the controlling and non-controlling shareholders.

Trial balance data for Perez and Santana on December 31, 2020, are as follows:

Instructions:

Equity Method Entries

a. Give all journal entries recorded by Perez with regard to its investment in Santana during 2020.

Consolidation (Elimination/Set-up) Entries

b. Give all consolidating entries needed to prepare a full set of consolidated financial statements for 2020.

Perez Corporation Debit Credit 95,000 140,000 Ssantana Corp Debit Credit 42.000 24,000 $ 180,000 60,000 700,000 50,000 30,000 300,000 199,500 250,000 220,000 84,000 50.000 54,000 20.000 $ $ Item Cash Accounts Receivable Inventory Land Buildings and Equipment Investment in Santana Company Cost of goods Sold Wage Expense Depreciation Expense Interest Expenses Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Wages Payable Notes Payable Common Stock Retained Earnings Sales Income from Ssantana Co. Total 24,000 27,000 60,000 8.000 10.000 32.000 290,000 80,000 90,000 34,000 300,000 400,000 204,000 32.000 18.000 100.000 120.000 80.000 360,000 520,000 31,500 $ 1,869,500 $ 1,869,500 $ 790,000 $ 790,000 Perez Corporation Debit Credit 95,000 140,000 Ssantana Corp Debit Credit 42.000 24,000 $ 180,000 60,000 700,000 50,000 30,000 300,000 199,500 250,000 220,000 84,000 50.000 54,000 20.000 $ $ Item Cash Accounts Receivable Inventory Land Buildings and Equipment Investment in Santana Company Cost of goods Sold Wage Expense Depreciation Expense Interest Expenses Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Wages Payable Notes Payable Common Stock Retained Earnings Sales Income from Ssantana Co. Total 24,000 27,000 60,000 8.000 10.000 32.000 290,000 80,000 90,000 34,000 300,000 400,000 204,000 32.000 18.000 100.000 120.000 80.000 360,000 520,000 31,500 $ 1,869,500 $ 1,869,500 $ 790,000 $ 790,000