Prime Company holds 80 percent of Suspect Companys 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:

	Prime Company									Suspect Company
Item	Debit				Credit					Debit				Credit
Cash & Accounts Receivable		$	125,000								$	31,000
Inventory			262,000									92,000
Land			70,000									70,000
Buildings & Equipment			490,000									170,000
Investment in Suspect Co.			203,590
Cost of Goods Sold			150,800									82,800
Depreciation and Amortization Expense			24,500									17,000
Other Expenses			11,000									6,000
Dividends Declared			30,000									5,000
Accumulated Depreciation						$	200,900								$	51,000
Accounts Payable							57,000									18,000
Bonds Payable							200,000									60,000
Common Stock							300,000									100,000
Retained Earnings							303,740									64,800
Sales							260,000									180,000
Gain on Sale of Equipment							15,500
Income from Suspect Co.							29,750
Total		$	1,366,890			$	1,366,890				$	473,800			$	473,800

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 $8,000 to Prime for $18,000.
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 $4,500 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.)

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.)