Powder Corporation acquired 70 percent of Solid Companys stock on December 31, 20X7, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 30 percent of Solid Companys book value. The two companies balance sheets on December 31, 20X9, are as follows:

POWDER CORPORATION AND SOLID COMPANY Balance Sheets December 31, 20X9
	Powder Corporation					Solid Company
Assets
Cash		$	44,400				$	20,000
Accounts Receivable			126,000					16,000
Inventory			173,000					123,000
Land			96,000					30,000
Buildings & Equipment			511,000					311,000
Less: Accumulated Depreciation			(174,000	)				(74,000	)
Investment in Solid Company Stock			217,120
Total Assets		$	993,520				$	426,000
Liabilities and Equity
Accounts Payable		$	73,000				$	23,000
Wages Payable			83,000					33,000
Bonds Payable			200,000
Common Stock			94,000					144,000
Retained Earnings			543,520					226,000
Total Liabilities & Equity		$	993,520				$	426,000

On December 31, 20X9, Powder holds inventory purchased from Solid for $72,000. Solids cost of producing the merchandise was $52,000. Solid also had purchased inventory from Powder. Solids ending inventory contains $87,000 of purchases that had cost Powder $62,000 to produce. On December 30, 20X9, Solid sells equipment to Powder for $97,000. Solid had purchased the equipment for $127,000 several years earlier. At the time of sale to Powder, the equipment had a book value of $53,000. The two companies file separate tax returns and are subject to a 40 percent tax rate. Powder does not record tax expense on its share of Solids undistributed earnings. Required: a. Prepare a consolidated balance sheet worksheet as of December 31, 20X9. (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.)

b. Prepare a consolidated balance sheet as of December 31, 20X9. (Amounts to be deducted should be indicated with a minus sign.)

POWDER CORPORATION AND SUBSIDIARY Consolidated Balance Sheet Worksheet December 31, 20X9 Consolidation Entries Powder Solid Co. DR CR Consolidated Assets Cash Accounts receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Investment in Solid Co. Deferred Tax Asset Total Assets Liabilities & Stockholders' Equity Accounts payable Wages Payable Bonds Payable Common stock Retained Earnings NCI in NA of Solid Co. Total Liabilities & Equity POWDER CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X9 Assets Total Assets Liabilities Stockholders' equity: Controlling Interest: Total controlling interest Total stockholders' equity Total Liabilities and Stockholders' Equity POWDER CORPORATION AND SUBSIDIARY Consolidated Balance Sheet Worksheet December 31, 20X9 Consolidation Entries Powder Solid Co. DR CR Consolidated Assets Cash Accounts receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Investment in Solid Co. Deferred Tax Asset Total Assets Liabilities & Stockholders' Equity Accounts payable Wages Payable Bonds Payable Common stock Retained Earnings NCI in NA of Solid Co. Total Liabilities & Equity POWDER CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X9 Assets Total Assets Liabilities Stockholders' equity: Controlling Interest: Total controlling interest Total stockholders' equity Total Liabilities and Stockholders' Equity