Prime Company holds $80$ percent of Suspect Company$$s stock, acquired on January $1,20$X$2,$ for $$174,000.$ On the acquisition date, the fair value of the noncontrolling interest was $$43,500.$ Suspect reported retained earnings of $$50,000$ and had $$100,000$ of common stock outstanding. Prime uses the fully adjusted equity method in accounting for its investment in Suspect.

Trial balance data for the two companies on December $31,20$X$6,$ are as follows:

Item Prime Company Suspect Company

Debit Credit Debit Credit

Cash and Accounts Receivable $ $120,000$ $ $36,000$

Inventory $257,00094,000$

Land $85,00080,000$

Buildings and Equipment $510,000180,000$

Investment in Suspect Company $241,790$

Cost of Goods Sold $127,60078,200$

Depreciation and Amortization Expense $25,50018,000$

Other Expenses $19,0005,000$

Dividends Declared $30,0005,000$

Accumulated Depreciation $ $209,100$ $ $54,000$

Accounts Payable $57,00023,000$

Bonds Payable $150,00030,000$

Common Stock $300,000100,000$

Retained Earnings $438,860119,200$

Sales $220,000170,000$

Gain on Sale of Equipment $15,500$

Income from Suspect Company $25,430$

Total $ $1,415,890$ $ $1,415,890$ $ $496,200$ $ $496,200$

Additional Information

At the date of combination, the book values and fair values of all separately identifiable assets and liabilities of Suspect were the same. At December $31,20$X$6,$ the management of Prime reviewed the amount attributed to goodwill as a result of its purchase of Suspect stock and concluded an impairment loss of $$19,575$ should be recognized in $20$X$6$ and shared proportionately between the controlling and noncontrolling shareholders.

On January $1,20$X$5,$ Suspect sold land that had cost $$9,000$ to Prime for $$20,250.$

On January $1,20$X$6,$ Prime sold to Suspect equipment that it had purchased for $$82,500$ on January $1,20$X$1.$ The equipment has a total economic life of $15$ years and was sold to Suspect for $$70,500.$ Both companies use straight$-$line depreciation.

There was $$6,500$ of intercompany receivables and payables on December $31,20$X$6.$

Required:

Give all consolidation entries needed to prepare a consolidation worksheet for $20$X$6.$ Prepare a three$-$part worksheet for $20$X$6.$ Prepare a consolidated balance sheet, income statement, and retained earnings statement for $20$X$6.$