Prime Company holds 80 percent of Suspect Company's stock, acquired on January 1, 202, for $182,000. On the acquisition date, the fair value of the noncontrolling interest was $45,500. 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, 20X6, are as follows: Item Cash & Accounts Receivable Inventory Land Buildings & Equipment Investment in Suspect Co. Cost of Goods Sold Depreciation and Amortization Expense Other Expanses Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Gain on Sale of Equipment Income from Suspect Co. Total Additional Information Prime Company Debit Credit Suspect Company Debit Credit $ 129,000 $ 39,000 271,800 92,000 85,000 65,000 490,000 160,000 232,620 156,600 73,600 24,500 16,000 14,000 4,800 30,000 5,000 $ 200,900 58,000 $ 48,000 25,000 210,000 40,000 300,000 100,000 335,488 101,600 270,000 160,000 16,000 22,348 $1,412,720 $1,412,720 $474,600 $474,600 1. 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, 20X6, 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 $20,475 should be recognized in 20X6 and shared proportionately between the controlling and noncontrolling shareholders. 2. On January 1, 20X5, Suspect sold land that had cost $9,000 to Prime for $20,250. 3. On January 1, 20X6, Prime sold to Suspect equipment that it had purchased for $82,500 on January 1, 20X1. The equipment has a total economic life of 15 years and was sold to Suspect for $71,000. Both companies use straight-line depreciation. 4. There was $6,500 of intercompany receivables and payables on December 31, 20X6 Required: a. Give all consolidation entries needed to prepare a consolidation worksheet for 20X6. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list A Record the basic consolidation entry. B Record the amortized excess value reclassification entry. c Record the excess value (differential) reclassification entry. D Record the entry to eliminate the intercompany receivable/payable. E Record the entry to eliminate the gain on the sale of land. F Record the entry to eliminate the gain on the equipment and to correct the asset's basis. Credit G Record the entry to adjust Accumulated Depreciation. Note: = journal entry has been entered Record entry Clear entry view consolidation entries b. Prepare a three-part worksheet for 20X6. (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.) c. Prepare a consolidated balance sheet, income statement, and retained earnings statement for 20X6. (Be sure to list the assets and liabilities in order of their liquidity. Amount to be deducted should be indicated by a minus sign.) Assets Total Assets Liabilities PRIME COMPANY AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X6 Total Liabilities Stockholders' Equity Controlling Interest