Prime Company holds 80 percent of Suspect Company's stock, acquired on January 1, 20X2, 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, 20X6, are as follows: Suspect Company Debit Credit $ 38,000 99,000 60,000 130,000 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 123,000 263,000 85,000 550,000 181,590 162,400 27,500 13,000 30,000 $ 225,500 63,000 200,000 300,000 321,260 280,000 15,500 30,230 $1,435,490 $1,435,490 78,200 13,000 4,000 5,000 $ 39,000 19,000 60,000 100,000 39,200 170,000 $427,200 $427,200 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 $19,575 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 $10,000 to Prime for $22,500. 3. On January 1, 20X6, Prime sold to Suspect equipment that it had purchased for $90,000 on January 1, 20X1. The equipment has a total economic life of 15 years and was sold to Suspect for $75,500. Both companies use straight-line depreciation. 4. There was $4,500 of intercompany receivables and payables on December 31, 20X6. Consolidation Worksheet Entries B C D E F G Record the basic consolidation entry. Note: Enter debits before credits. Entry Accounts Debit Credit Consolidation Worksheet Entries