Pillow Corporation acquired 80 percent ownership of Sheet Company on January 1, 20X7, for $173,000. At that date, the fair value of the noncontrolling interest was $43,250. The trial balances for the two companies on December 31, 20X8, included the following amounts:

	Pillow Corporation									Sheet Company
Item	Debit				Credit					Debit				Credit
Cash		$	59,000								$	31,000
Accounts Receivable			83,000									71,000
Inventory			275,000									118,000
Land			80,000									30,000
Buildings & Equipment			500,000									150,000
Investment in Sheet Company			206,200
Cost of Goods Sold			490,000									310,000
Depreciation Expense			25,000									15,000
Other Expenses			62,000									100,000
Dividends Declared			45,000									25,000
Accumulated Depreciation						$	180,000								$	90,000
Accounts Payable							86,000									30,000
Mortgages Payable							200,000									70,000
Common Stock							300,000									50,000
Retained Earnings							385,000									140,000
Sales							650,000									470,000
Income from Sheet Company							24,200
		$	1,825,200			$	1,825,200				$	850,000			$	850,000

Additional Information

1. On January 1, 20X7, Sheet reported net assets with a book value of $150,000 and a fair value of $191,250. Goodwill of $25,000 was recorded at the acquisition. Accumulated depreciation on buildings and equipment was $60,000 on the acquisition date. Sheet's depreciable assets had an estimated economic life of 11 years on the date of combination.
2. At December 31, 20X8, Pillows management reviewed the amount attributed to goodwill and concluded goodwill was impaired and should be reduced to $14,000. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders.
3. Pillow used the equity method in accounting for its investment in Sheet.
4. Detailed analysis of receivables and payables showed that Pillow owed Sheet $9,000 on December 31, 20X8.
5. Assume that the Investment in Sheet Company at 1/1/X8 is $202,000.

Required: a. Prepare all journal entries recorded by Pillow with regard to its investment in Sheet during 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Prepare all consolidation entries needed to prepare a full set of consolidated financial statements for 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

c. Prepare a three-part consolidation worksheet as of December 31, 20X8. (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.)