Phone Corporation acquired 70 percent of Smart Corporation's common stock on December 31, 20X4, for $95,900. At that date, the fair value of the noncontrolling interest was $41,100. 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 $68,300$37,000

Accounts Receivable 96,00057,000

Inventory 142,00087,000

Land 77,00031,000

Buildings & Equipment 421,000257,000

Less: Accumulated Depreciation (153,000)(76,000)

Investment in Smart Corporation 95,900

Total Assets $747,200$393,000

Accounts Payable $139,500$26,000

Mortgage Payable 344,700251,000

Common Stock 72,00037,000

Retained Earnings 191,00079,000

Total Liabilities & Stockholders' Equity $747,200$393,000

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 $93,000, and buildings and equipment, which had a fair value of $196,000. 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 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.)

A- Record the basic consolidation entry. B- Record the excess value (differential) reclassification entry. C- Record the entry to eliminate the intercompany accounts. D- Record the optional accumulated depreciation consolidation entry.

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