Pooler purchased $61\%$ of Scenic's outstanding common stock for $$646,419$ on January $1,20$X$6,$ when the book value of Scenic's

net assets was equal to $$365,000.$ The non$-$controlling interest $($NCI$)$ had an acquisition$-$date fair value of $$252,103.$ Trial balance

data for Pooler and Scenic as of December $31,20$X$6$ are shown below. At the time of acquisition, Scenic's A$/$D balance was

$$35,000.$ Additionally, several assets had fair values that differed from their book values $($BV$)$: Inventory, $$21,000$ above BV;

Land, $$10,000$ below BV; Equipment, $$60,000$ above BV; and a copyright, $$18,000$ above BV$.$ The equipment had six years

remaining in its service life, and the copyright had five years remaining. Per GAAP, management evaluated goodwill and found no

evidence of impairment.

During $20$X$6,$ Pooler and Scenic had several transactions that occurred between the two companies. First, the companies had

intercompany payables and receivables totaling $$15,000.$ Second, Pooler sold inventory to Scenic for $$85,000$ that cost Pooler

$$50,000.$ Third, Scenic sold inventory to Pooler for $$80,000$ with a cost of $$58,000.$ At the end of $20$X$6,$ Pooler had $$25,000$ of the

inventory from Scenic in its inventory. Scenic's year$-$end inventory count showed $$40,000$ of inventory remaining that it had

purchased from Pooler. As this was Pooler's first year of ownership of Scenic, there were no intercompany inventory transactions

in $20$X$5.$

Pooler uses the fully$-$adjusted equity method in accounting for its investment in Scenic.

Instructions

$1.$ Prepare all equity$-$method entries under the fully$-$adjusted equity method related to the investment in Scenic during $20$X$6$

including Pooler's initial purchase. You may use a spreadsheet or document.

$2.$ Prepare a consolidation worksheet for $20$X$6$ using the accompanying template that includes all necessary adjustments needed to

produce a single income statement, statement of retained earnings, and balance sheet.

$3.$ Prepare the $20$X$6$ year end Balance Sheet and Income Statement