Phone Corporation acquired 70 percent of Smart Corporations common stock on December 31, 20X4, for $95,200. At that date, the fair value of the noncontrolling interest was $40,800. 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		$	63,300				$	35,000
Accounts Receivable			102,000					44,000
Inventory			141,000					93,000
Land			77,000					36,000
Buildings & Equipment			415,000					269,000
Less: Accumulated Depreciation			(159,000	)				(74,000	)
Investment in Smart Corporation			95,200
Total Assets		$	734,500				$	403,000
Accounts Payable		$	151,500				$	35,000
Mortgage Payable			316,000					253,000
Common Stock			69,000					33,000
Retained Earnings			198,000					82,000
Total Liabilities & Stockholders Equity		$	734,500				$	403,000

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 $99,000, and buildings and equipment, which had a fair value of $210,000. At December 31, 20X4, Phone reported accounts payable of $13,100 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.)

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. (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.)

c. Prepare a consolidated balance sheet in good form. (Amounts to be deducted should be indicated with a minus sign.)

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 $ 0 $ 0 $ 0 $ 0 $ 0 Liabilities and Equity Accounts payable Mortgage payable Common stock Retained earnings NCI in NA of Smart Corporation Total Liabilities and Equity $ 0 $ 0 $ 0 $ 0 $ 0 Consolidated Balance Sheet December 31, 20X4 Assets 0 $ 0 Total Assets Liabilities Stockholders' Equity: Controlling Interest: 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 $ 0 $ 0 $ 0 $ 0 $ 0 Liabilities and Equity Accounts payable Mortgage payable Common stock Retained earnings NCI in NA of Smart Corporation Total Liabilities and Equity $ 0 $ 0 $ 0 $ 0 $ 0 Consolidated Balance Sheet December 31, 20X4 Assets 0 $ 0 Total Assets Liabilities Stockholders' Equity: Controlling Interest