Punk Corporation purchased 90 percent of Soul Company's voting common shares on January 1, 20X2, at underlying book value. At that date, the fair value of the noncontrolling Interest was equal to 10 percent of the book value of Soul Company. Punk also purchased $100,000 of 6 percent, five-year bonds directly from Soul on January 1, 20X2, for $104,000. The bonds pay interest annually on December 31. The trial balances of the companies as of December 31, 20X4, are as follows: Item Cash & Receivable Inventory Buildings & Equipment Investment in Soul Company Stock Investment in Soul Company Bonds Cost of Goods Sold Depreciation Expense Interest Expense Dividends Declared Accumulated Depreciation Current Payable Bonds Payable Bond Premium Common Stock Retained Earnings Sales Interest Income Income from Soul Company Stock Total Required: Punk Corporation Debit Soul Company Credit Debit Credit $ 22,000 165,000 $ 36,600 400,000 75,000 240,000 121,392 101,720 86,000 20,000 16,000 30,000 $140,000 92,400 200,000 79,800 15,000 5,202 20,000 $ 80,000 35,000 100,000 1,720 120,000 242,012 140,000 80,000 49,882 125,000 $962,112 5,202 22,498 $962,112 $471,602 $471,602 a. Prepare the journal entry or entries for 20X4 on Punk's books related to its investment in Soul Common stock. (If no entry is required for a transaction/event, select "No Journal entry required" In the first account field. Do not round your Intermediate calculations. Round your final answers to nearest whole dollar.) A No Event 1 Cash Investment in Soul Company stock Answer is complete and correct. General Journal Debit Credit 18,000 18,000 B 2 Investment in Soul Company stock 22,498 Income from Soul Company stock 22,498 b. Prepare the journal entry or entries for 20X4 on Punk's books related to its Investment In Soul Company bonds. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field.) Answer is complete and correct. No Event A 1 Cash Interest income General Journal Debit Credit 6,000 5,202 Investment in Soul Company bonds 798 c. Prepare the journal entry or entries for 20X4 on Soul's books related to its bonds payable. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field.) Answer is complete and correct. No Event General Journal Debit Credit A 1 Interest expense Bond premium 5,202 798 Cash 6,000 d. Prepare the consolidation entries needed to complete a consolidated worksheet for 20X4. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field. Do not round your Intermediate calculations. Round your final answers to nearest whole dollar.) Answer is complete but not entirely correct. No Event A 1 Common stock Retained earnings Accounts Income from Soul Company stock NCI in NI of Soul Company Dividends declared Investment in Soul Company stock NCI in NA of Soul Company Debit Credit 80,000 49,882 22,498 98,974 20,000 121,392 13,608 B 2 Bonds payable 100,000 Bond premium 1,720 Interest income 5,200 Investment in Soul Company bonds 798 Interest expense 121,392 e. Prepare a three-part consolidated worksheet for 20X4. (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.) Answer is not complete. PUNK CORPORATION AND SUBSIDIARY Consolidated Financial Statement Worksheet December 31, 20X4 Consolidation Entries Punk Soul DR CR Consolidated Corp. Company Income Statement Sales 140,000 125,000 266,000 Interest Income 5,202 5,202 0 Less: COGS (88,000) (79,800) (165.800) Less: Depreciation Expense (20,000) (15,000) (35,000) Less: Interest Expenses (16,000) (5.202) 5,202 (16,000) Income from Soul Company Stock 22,498 22,498 0 Consolidated Net Income 45,700 24,998 27,700 5,202 48,200 NCI in Net Income Controlling Interest in Net Income 45,700 24,988 27,700 5,202 48,200 Statement of Retained Earnings Beginning Balance 47,000 (47,000) Net Income 45,700 24.008 27,700 5,202 48,200 Less: Dividends Declared (30,000) (20,000) 20,000 (30,000) Ending Balance 15,700 4,988 74,700 25,202 (28,800) Balance Sheet Assets Cash and Accounts Receivable 22,000 38.600 58,600 Inventory 165,000 75,000 240,000 Buildings & Equipment 400,000 240,000 640,000 Less: Accumulated Depreciation (140,000) (80,000) (220,000) Investment in Soul Company Bonds 101,720 101,720 0 Investment in Soul Company Stock 121,392 121,392 0 Total Assets 670,112 271,600 0 223,112 718,600 Liabilities & Equity Current Payable 92,400 Bonds Payable Bond Premium 200,000 35,000 100.000 127,400 100,000 200,000 1,720 1,720 0 Common Stock 120,000 80.000 80,000- 120,000 Retained Earnings 15,700 4,998 74,700 25,202 (28,800) NCI in NA of Soul Company Total Liabilities & Equity 428,100 221,718 256,420 25,202 418,600