Phone Corporation acquired 70 percent of Smart Corporations common stock on December 31, 20X4, for $93,800. At that date, the fair value of the noncontrolling interest was $40,200. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:

	Phone					Smart
Item	Corporation					Corporation
Cash		$	51,300				$	23,000
Accounts Receivable			97,000					51,000
Inventory			142,000					83,000
Land			79,000					44,000
Buildings & Equipment			421,000					266,000
Less: Accumulated Depreciation			(160,000	)				(79,000	)
Investment in Smart Corporation			93,800
Total Assets		$	724,100				$	388,000
Accounts Payable		$	141,500				$	29,000
Mortgage Payable			314,600					246,000
Common Stock			76,000					34,000
Retained Earnings			192,000					79,000
Total Liabilities & Stockholders Equity		$	724,100				$	388,000

At the date of the business combination, the book values of Smarts assets and liabilities approximated fair value except for inventory, which had a fair value of $89,000, and buildings and equipment, which had a fair value of $202,000. At December 31, 20X4, Phone reported accounts payable of $12,500 to Smart, which reported an equal amount in its accounts receivable. Required: a. Prepare the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business combination.

• Record the basic consolidation entry.
• Record the excess value (differential) reclassification entry.
• Record the entry to eliminate the intercompany accounts.
• Record the optional accumulated depreciation consolidation entry

b. Prepare a consolidated balance sheet worksheet.

c. Prepare a consolidated balance sheet in good form.