Phone Corporation acquired 70 percent of Smart Corporation's common stock on December 31, 20X4, for $98,700. At that date, the fair value of the noncontrolling Interest was $42,300. Data from the balance sheets of the two companies Included the following amounts as of the date of acquisition: Phone Corporation $ 56,300 101,888 132,000 73,000 428,000 (167,880) 98,700 $ 722,880 $ 144,500 304,500 73,800 200,000 $ 722,880 Smart Corporation $ 37,000 59,800 84,800 32,880 267,000 (72,880) Item Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation Investment in Smart Corporation Total Assets Accounts Payable Mortgage Payable Common Stock Retained Earnings Total Liabilities & Stockholders' Equity $407,800 $ 32,000 255,888 38,888 82,800 $407,880 At the date of the business combination, the book values of Smart's assets and liabilities approximated fair value except for Inventory, which had a fair value of $90,000, and buildings and equipment, which had a fair value of $210,000. At December 31, 20X4, Phone reported accounts payable of $14,500 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) b. Prepare a consolidated balance sheet worksheet. (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 deblt 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.) PHONE CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X4 Consolidation Entries Phone Corp. Smart Corp. DR CR Consolidated Assets Cash Accounts receivable Inventory Land Buildings and equipment Less: Accumulated depreciation Investment in Smart Corporation Total Assets Liabilities and Equity Accounts payable Mortgage payable Common stock Retained earnings NCI in NA of Smart Corporation Total Liabilities and Equity c. Prepare a consolidated balance sheet in good form. (Amounts to be deducted should be Indicated with a minus sign.) PHONE CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X4 Assets Total Assets Liabilities Stockholders' Equity: Controlling Interest Total Controlling Interest Total Stockholders' equity Total Liabilities and Stockholders' Equity