Proud Corporation acquired 80 percent of Spirited Companys voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Spirited at that date. Assume that the accumulated depreciation on depreciable assets was $52,000 on the acquisition date. Proud uses the equity method in accounting for its ownership of Spirited during 20X3. On December 31, 20X3, the trial balances of the two companies are as follows:

		Proud Corporation								Spirited Company
Item	Debit				Credit				Debit					Credit
Current Assets		$	184,000							$	115,000
Depreciable Assets			506,000								303,000
Investment in Spirited Company			120,960
Depreciation Expense			23,000								13,000
Other Expenses			102,000								70,000
Dividends Declared			46,000								22,800
Accumulated Depreciation						$	174,000							$	65,000
Current Liabilities							36,000								26,000
Long-Term Debt							125,160								175,800
Common Stock							185,000								89,000
Retained Earnings							215,000								39,000
Sales							210,000								129,000
Income from Spirited Company							36,800
		$	981,960			$	981,960			$	523,800			$	523,800

Required: a. Prepare all consolidation entries required as of December 31, 20X3, to prepare consolidated financial statements. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Prepare a three-part consolidation worksheet. (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 20X3. (Amounts to be deducted should be indicated with a minus sign.)