Prime Company holds 80 percent of Suspect Company's stock, acquired on January 1, 20X2, 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: Suspect Company Debit Credit $ 38,000 88,000 65,000 150,000 Item Cash & Accounts Receivable Inventory Land Buildings & Equipment Investment in Suspect Co. Cost of Goods Sold Depreciation and Amortization Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Gain on Sale of Equipment Income from Suspect Co. Total Prime Company Debit Credit $ 115,000 265,000 65,000 500,000 221,070 139,200 25,000 19,000 30,000 $ 205,000 61,000 190,000 300,000 340, 660 240,000 15,500 27, 110 $1,379,270 $1,379,270 78,200 15,000 5,000 5,000 $ 45,000 23,000 25,000 100,000 81,200 170,000 $444,200 $444,200 Additional Information 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 $75,000 on January 1, 20X1. The equipment has a total economic life of 15 years and was sold to Suspect for $65,500. 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Prepare a consolidated balance sheet, income statement, and retained earnings statement for 20X6. Prime Company holds 80 percent of Suspect Company's stock, acquired on January 1, 20X2, 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: Suspect Company Debit Credit $ 38,000 88,000 65,000 150,000 Item Cash & Accounts Receivable Inventory Land Buildings & Equipment Investment in Suspect Co. Cost of Goods Sold Depreciation and Amortization Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Gain on Sale of Equipment Income from Suspect Co. Total Prime Company Debit Credit $ 115,000 265,000 65,000 500,000 221,070 139,200 25,000 19,000 30,000 $ 205,000 61,000 190,000 300,000 340, 660 240,000 15,500 27, 110 $1,379,270 $1,379,270 78,200 15,000 5,000 5,000 $ 45,000 23,000 25,000 100,000 81,200 170,000 $444,200 $444,200 Additional Information 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 $75,000 on January 1, 20X1. The equipment has a total economic life of 15 years and was sold to Suspect for $65,500. 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Prepare a consolidated balance sheet, income statement, and retained earnings statement for 20X6