PROBLEM 6-4 Upstream and Downstream Sales Pace Company owns 85% of the outstanding common stock of Sand Company and all the outstanding common stock of Star Company. During 2012, the affiliates engaged in intercompany sales as follows:

Sales of Merchandise:

Pace to Sand $ 40,000

Sand to Pace 60,000

Sand to Star 75,000

Star to Pace 50,000

$40,000 + 60,000 + 75,000 + 50,000 = $225,000

The following amounts of intercompany profits were included in the December 31, 2011, and December 31, 2012, inventories of the individual companies:

Intercompany Profit in December 31, 2011, Inventory of

Selling Co. Pace Sand Star Total

Pace Co. $7,000 $7,000

Sand Co. $5,000 $3,000 $8,000

Star. Co. $8,000 $8,000

Total $13,000 $7,000 $3,000 $23,000

Intercompany Profit in December 31, 2012, Inventory of

Selling Co. Pace Sand Star Total

Pace Co. $2,000 $2,000

Sand Co. $6,000 $9,000 $15,000

Star Co. $4,000 $4,000

Total $10,000 $2,000 $9,000 $21,000

Income from each companys independent operations (including sales to affiliates) for the year ended December 31, 2012, is presented here:

Pace Company $200,000

Sand Company 150,000

Star Company 125,000

Required: A. Prepare in general journal form the workpaper entries necessary to eliminate intercompany sales and intercompany profit in the December 31, 2012, consolidated financial statements workpaper.

B. Calculate the balance to be reported in the consolidated income statement for the following line items: Consolidated income Noncontrolling interest in consolidated income Controlling interest in consolidated income

Come anyone help me, please?