Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $119,000. At that date, the noncontrolling interest had a fair value of $51,000 and Soda reported $70,000 of common stock outstanding and retained earnings of $33,000. The differential is assigned to buildings and equipment, which had a fair value $29,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $38,000 higher than book value and a remaining life of five years at the date of the business combination. Trial balances for the companies as of December 31, 20X3, are as follows: On December 31, 20X2, Soda purchased inventory for $31,200 and sold it to Pop for $48,000. Pop resold $30,000 of the inventory (i.e., $30,000 of the $48,000 acquired from Soda) during 20X3 and had the remaining balance in inventory at December 31, 20X3. During 20X3, Soda sold inventory purchased for $65,000 to Pop for $100,000, and Pop resold all but $29,000 of its purchase. On March 10, 20X3, Pop sold inventory purchased for $17,000 to Soda for $34,000. Soda sold all but $8,500 of the inventory prior to December 31, 20X3. Assume Pop uses the fully adjusted equity method, that both companies use straight-line depreciation, and that no property, plant, and equipment has been purchased since the acquisition.

a. Record the basic consolidation entry.

b. Record the amortized excess value reclassification entry.

c. Record the excess value (differential) reclassification entry.

d. Record the optional accumulated depreciation consolidation entry.

e. Record the entry to reverse last year's deferral.

f. Record the deferral of the unrealized profit on inventory transfers from 20X2.

g. Record the deferral of this year's unrealized profits on inventory transfers

b. Prepare a three-part consolidation worksheet for 20X3

Pop Corporation Debit oda Compan Credit Debit Credit Item Cash & Accounts Receivable Inventory Land Buildings & Equipment Inv Cost of Goods Sold Depreciation Expense Interest Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Bond Premium Common Stock Retained Earnings Sales Other Income Income from Soda Company $ 18,400 168,000 83,000 370,000 117,235 189,000 20,000 19,000 33,000 $ 24,600 38,000 43,000 263,000 estment in Soda Company 82,800 15,000 8,200 18,000 $ 143,000 95,400 240,790 $ 75,000 38,000 110,000 1,600 70,000 63,000 135,000 123,000 130,900 263,000 12,600 8,945 $1,017,635 $1,017,635 $492,600 $492,600 POP CORPORATION & SUBSIDIARY Consolidated Financial Statement Worksheet For 20X3 Consolidation Entries Pop Corp Soda Co DR CR Consolidated Income Statement Sales Other Income Less: COGS Less: Depreciation Expense Less: Interest Expense Less: Amortization Expense Income from Soda Company Consolidated Net Income NCI in Net Income Controlling Interest in Net Income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Balance Sheet Cash and Accounts Receivable Inventory Land 0 0 0 0 0 0 0 Buildings & Equipment Less: Accumulated Depreciation Investment in Soda Company Patents Total Assets Accounts Payable Bonds Payable Bonds Premium Common Stock Retained Earnings NCI in NA of Soda Company Total Liabilities & Equity 0 S 0 S 0 0 S 0 S 0 Pop Corporation Debit oda Compan Credit Debit Credit Item Cash & Accounts Receivable Inventory Land Buildings & Equipment Inv Cost of Goods Sold Depreciation Expense Interest Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Bond Premium Common Stock Retained Earnings Sales Other Income Income from Soda Company $ 18,400 168,000 83,000 370,000 117,235 189,000 20,000 19,000 33,000 $ 24,600 38,000 43,000 263,000 estment in Soda Company 82,800 15,000 8,200 18,000 $ 143,000 95,400 240,790 $ 75,000 38,000 110,000 1,600 70,000 63,000 135,000 123,000 130,900 263,000 12,600 8,945 $1,017,635 $1,017,635 $492,600 $492,600 POP CORPORATION & SUBSIDIARY Consolidated Financial Statement Worksheet For 20X3 Consolidation Entries Pop Corp Soda Co DR CR Consolidated Income Statement Sales Other Income Less: COGS Less: Depreciation Expense Less: Interest Expense Less: Amortization Expense Income from Soda Company Consolidated Net Income NCI in Net Income Controlling Interest in Net Income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Balance Sheet Cash and Accounts Receivable Inventory Land 0 0 0 0 0 0 0 Buildings & Equipment Less: Accumulated Depreciation Investment in Soda Company Patents Total Assets Accounts Payable Bonds Payable Bonds Premium Common Stock Retained Earnings NCI in NA of Soda Company Total Liabilities & Equity 0 S 0 S 0 0 S 0 S 0