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:

	Prime	Company	Suspect	Company
Item	Debit	Credit	Debit	Credit
Cash & Accounts Receivable	$121,000		$39,000
Inventory	279,000		89,000
Land	65,000		85,000
Buildings & Equipment	490,000		130,000
Investment in Suspect Co.	210,770
Cost of Goods Sold	139,200		78,200
Depreciation and Amortization Expense	24,500		13,000
Other Expenses	16,000		8,000
Dividends Declared	30,000		5,000
Accumulated Depreciation		200,900		39,000
Accounts Payable		58,000		15,000
Bonds Payable		160,000		55,000
Common Stock		300,000		100,000
Retained Earnings		374,860		68,200
Sales		240,000		170,000
Gain on Sale of Equipment		14,500
Income from Suspect Co.		27,210
Total	$1,375,470	$1,375,470	$447,200	$447,200

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 $82,500 on January 1, 20x1. The equipment has a total economic life of 15 years and was sold to Suspect for $69,500. Both companies use straight-line depreciation.

4) There was $5,500 of intercompany receivables and payables on December 31, 20x6.

Required:

a. Give all consolidation entries needed to prepare a consolidated worksheet for 20x6.

b. Prepare a three-part worksheet for 20x6.

c. Prepare a consolidated balance sheet, income statement, and retained earnings statement for 20x6.