Power Corporation acquired $75$ percent of Best Company's ownership on January $1,20$x$8,$ for $$96,000.$ At that date, the fair value of the non$-$controlling interest was$$32,000.$ The book value of Best's net assets at acquisition was $$100,000.$ The book values and fair values of Best's assets and liabilities were equal, except for Best's buildings and equipment, which were worth $$20,000$ more than book value. Accumulated depreciation was $$30,000$ on the acquisition date. Buildings and equipment are depreciated on a $10-$year basis. Although goodwill is not amortized, the management of Power concluded at December $31,20$x$8,$ that goodwill from its purchase of Best shares had been impaired and the correct carrying amount was $$2,500.$ Goodwill and goodwill impairment were assigned proportionately to the controlling and non$-$controlling shareholders. No additional impairment occurred in $20$x$9.$ Trial balance data for Power and Best on December $31,20$x$9,$ are as follows: Power Corporation Best Company Items Debit Credit Debit Credit Cash $$68,50032,000$ Accounts Receivable $85,00014,000$ Inventory $97,00024,000$ Land $50,00025,000$ Buildings & Equipment $350,000150,000$ Investment in Best Co Stock $106,875$ Cost of Goods Sold $145,000114,000$ Wage Expense $35,00020,000$ Depreciation Expense $25,00010,000$ Interest Expense $12,0004,000$ Other Expenses $23,00016,000$ Dividends Declared $30,00020,000$ Accumulated Depreciation $$170,000$ $$50,000$ Accounts Payable $51,00015,000$ Wages Payable $14,0006,000$ Notes Payable $150,00050,000$ Common Stock $200,00060,000$ Retained Earnings $126,87548,000$ Sales $290,000200,000$ Income from Subsidiary $25,500$ $$1,027,375$ $$1,027,375$ $$429,000$ $$429,000$ Required: a$.$ Give all elimination entries needed to prepare a three$-$part consolidation worksheet as of December $31,20$x$9.$ b$.$ Prepare a three$-$part consolidation worksheet for $20$x$9$ in good form. c$.$ Prepare a consolidated balance sheet, income statement, and retained earnings statement for $20$x$9.100\%$ Time $20$X$820$x$9$ Building Goodwill Equity Method Entries: To record net income To record dividends To amortize building & equipment differential a$.$ Eliminating entries: ED$)$ Eliminate income from subsidiary E$2)$ Assign income to noncontrolling interest: E$(3)1-$ Eliminate beginning investment balance: E$(4)$ Assign beginning differential E$(5)$ Amortize differential related to buildings and equipment: Investment in Sub Income from Sub NCI Common Stock Retained Earnings Income to NCI Power Corp. Best Co$.$ DR CR Consolidated Income Statement Sales COGS Wage Expense Depreciation Expense Interest Expense Other Expenses Income from Sub Consolidated Net Income Income to NCI Controlling Interest in Net Income $290,000(145,000)(35,000)(25,000)(12,000)(23,000)25,50075,500200,000(114,000)(20,000)(10,000)(4,000)(16,000)36,00075,50036,000126,87548,000$ Retained Earnings Beginning Balance Net Income Less: Dividends Declared Ending Balance $(30,000)(20,000)$ Balance Sheet Cash AR Inventory Land Buildings & Equipment Less: Accumulated Depreciation Investment in Sub Differential Goodwill Total Assets $68,50085,00097,00050,000350,000(170,000)106,87532,00014,00024,00025,000150,000(50,000)$ Accounts Payable Wages Payable Notes Payable Common Stock Retained Earnings NCI in NA Total Liabilities & Equity $51,00014,000150,000200,00015,0006,00050,00060,000$ P$5-34($continued$)$ C$.$ Power Corporation and Subsidiary Consolidated Balance Sheet December $31,20$X$9$ Cash Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Goodwill Total Assets Accounts Payable Wages Payable Notes Payable Stockholders' Equity: Controlling Interest: Common Stock Retained Earnings Total Controlling Interest Noncontrolling Interest Total Stockholders' Equity Total Liabilities and Stockholders' Equity Power Corporation and Subsidiary Consolidated Income Statement Year Ended December $31,2009$ Sales Cost of Goods Sold Wage Expense Depreciation Expense Interest Expense Other Expenses Total Expenses Consolidated Net Income Income to Noncontrolling Interest Income to Controlling Interest Power Corporation and Subsidiary Consolidated Retained Earnings Statement Year Ended December $31,20$x$9$ Retained Earnings, January $1,20$X$9$ Income to Controlling Interest, $20$X$9$ Dividends Declared, $20$x$9$ Retained Earnings, December $31,20$x$9$