Prime Company holds 80 percent of Lane Companys stock, acquired on January 1, 20X2, for $160,000. On the acquisition date, the fair value of the noncontrolling interest was $40,000. Lane 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 Lane.

Trial balance data for the two companies on December 31, 20X6, are as follows:

	Prime Company							Lane Company
Item	Debit			Credit				Debit			Credit
Cash and Accounts Receivable	$	113,000						$	35,000
Inventory		260,000							90,000
Land		80,000							80,000
Buildings and Equipment		500,000							150,000
Investment in Lane Company Stock		191,600
Cost of Goods Sold		140,000							60,000
Depreciation and Amortization		25,000							15,000
Other Expenses		15,000							5,000
Dividends Declared		30,000							5,000
Accumulated Depreciation				$	205,000						$	45,000
Accounts Payable					60,000							20,000
Bonds Payable					200,000							50,000
Common Stock					300,000							100,000
Retained Earnings					322,000							95,000
Sales					240,000							130,000
Gain on Sale of Equipment					20,000
Income from Subsidiary					7,600
Total	$	1,354,600		$	1,354,600			$	440,000		$	440,000

Additional Information

1.	At the date of combination, the book values and fair values of all separately identifiable assets and liabilities of Lane were the same. At December 31, 20X6, the management of Prime reviewed the amount attributed to goodwill as a result of its purchase of Lane stock and concluded an impairment loss of $18,000 should be recognized in 20X6 and shared proportionately between the controlling and noncontrolling shareholders.
2.	On January 1, 20X5, Lane sold land that had cost $8,000 to Prime for $18,000.
3.	On January 1, 20X6, Prime sold to Lane equipment that it had purchased for $75,000 on January 1, 20X1. The equipment has a total economic life of 15 years and was sold to Lane for $70,000. Both companies use straight-line depreciation.
4.	There was $7,000 of intercompany receivables and payables on December 31, 20X6.

Required:

a.

Give all consolidation entries needed to prepare a consolidation worksheet for 20X6. As below (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Record the basic consolidation entry.

Record the amortized excess value reclassification entry.

Record the excess value (differential) reclassification entry.

Record the entry to eliminate the intercompany receivable/payable.

Record the entry to eliminate the gain on the purchase of land.

Record the entry to eliminate the gain on the equipment and to correct the asset's basis.

Record the entry to adjust Accumulated Depreciation.

b.

Prepare a three-part worksheet for 20X6.

c.	Prepare a consolidated balance sheet, income statement, and retained earnings statement for 20X6.