Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $112,700. At that date, the noncontrolling interest had a fair value of $48,300 and Soda reported $71,000 of common stock outstanding and retained earnings of $31,000. The differential is assigned to buildings and equipment, which had a fair value $28,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $31,000 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:

	Pop Corporation								Soda Company
Item		Debit			Credit				Debit				Credit
Cash & Accounts Receivable		$	16,400						$	22,600
Inventory			166,000							36,000
Land			81,000							41,000
Buildings & Equipment			350,000							261,000
Investment in Soda Company			117,200
Cost of Goods Sold			187,000							80,800
Depreciation Expense			20,000							15,000
Interest Expense			17,000							6,200
Dividends Declared			31,000							16,000
Accumulated Depreciation					$	141,000							$	85,000
Accounts Payable						93,400								36,000
Bonds Payable						219,250								94,000
Bond Premium														1,600
Common Stock						121,000								71,000
Retained Earnings						128,900								61,000
Sales						261,000								130,000
Other Income						10,600
Income from Soda Company						10,450
		$	985,600		$	985,600			$	478,600			$	478,600

On December 31, 20X2, Soda purchased inventory for $31,500 and sold it to Pop for $45,000. Pop resold $30,000 of the inventory (i.e., $30,000 of the $45,000 acquired from Soda) during 20X3 and had the remaining balance in inventory at December 31, 20X3. During 20X3, Soda sold inventory purchased for $56,000 to Pop for $80,000, and Pop resold all but $25,000 of its purchase. On March 10, 20X3, Pop sold inventory purchased for $15,000 to Soda for $30,000. Soda sold all but $7,800 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. Required: a. Prepare all consolidation entries needed to prepare a full set of consolidated financial statements at December 31, 20X3, for Pop and Soda. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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

Note: Enter debits before credits.

Entry	Accounts	Debit	Credit
6

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

Note: Enter debits before credits.

Entry	Accounts	Debit	Credit
7