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 $96,000 of 6 percent, five-year bonds directly from Soul on January 1, 20X2. for $100,000. The bonds pay interest annually on December 31. The trial balances of the companies as of December 31, 20X4, are as follows: Debit Punk Corporation Credit $ 36,000 173,000 416,000 102,816 97,600 Soul Company Debit Credit $ 50,600 94, eee 247,000 82,eee Item Cash & Receivables 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 Payables Bonds Payable Bond Premium Common Stock Retained Earnings 17, 15,760 27,800 75,800 12, eee 4,960 17, eee $126,000 132,900 196,000 $ 66,000 113,762 96,000 1,600 61,eee 101, eee 224,000 31,000 5 of 6 79F Sunny search Soul Company Debit Credit $ 50,600 94,000 247,000 Item Cash & Receivables 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 Payables Bonds Payable Bond Premium Common Stock Retained Earnings Sales Interest Income Income from Soul Company Stock Punk Corporation Debit Credit $ 36,000 173,000 416,000 102,816 97,600 82,000 17,000 15,760 27,000 $126,000 132,900 196,000 75,800 12,000 4,960 17,000 $ 66,000 113,760 96,000 1,600 61,000 31,898 132,000 101, eee 224,000 147,000 4,960 35, 316 $967,176 $967, 176 $501,360 $501,360 Total Required: a. Prepare the journal entry or entries for 20X4 on Punk's books related to its investment in Soul Company stock. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Answer is not complete. No Event General Journal Debit Credit 1 Cash Investment in Soul Company stock B 2 Investment in Soul Company stock Income from Soul Company stock b. Prepare the journal entry or entries for 20X4 on Punk's books related to its investment in Soul Company bonds. (If required for a transaction/event, select "No journal entry required" in the first account field.) Answer is not complete. No Event General Journal Debit Credit 1 Cash Interest income 4,960 Investment in Soul Company bonds 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 not complete. No Event General Journal Debit Credit A 1 Interest expense 4,960 Bond premium Cash 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.) & Answer is not complete. No Event Accounts Debit Credit A 1 Common stock 61,000 31,000 Retained earnings Income from Soul Company stock NCI in NI of Soul Company 35,316 Dividends declared Investment in Soul Company stock NCI in NA of Soul Company B 2 Bonds payable C 96,000 Retained earnings 31,000 35,316 Income from Soul Company stock NCI in NI of Soul Company Dividends declared Investment in Soul Company stock NCI in NA of Soul Company B 2 Bonds payable Bond premium Interest income 96,000 1,600 4,960 Investment in Soul Company bonds 97,600 Interest expense 4,960 e. Prepare a three-part consolidated worksheet for 20X4. (Values in the first two columns (the "parent" and "subsid that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" colu entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries in and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount amount in the credit column of the worksheet.) X Answer is not complete. PUNK CORPORATION AND SUBSIDIARY Consolidated Financial Statement Worksheet December 31, 20X4 Consolidation Entries Punk Corp. Soul Company DR CR Consolidated Income Statement Sales 147,000 132,000 279,000 Interest Income 4.960 4.960 0 Nort TVINUUNTUNIN OUDOIUINIT Consolidated Financial Statement Worksheet December 31, 20X4 Consolidation Entries Punk Corp. Soul Company DR CR Consolidated Income Statement Sales 147,000 132,000 279,000 Interest Income 0 4,960 0 4,960 (82,000) Less: COGS (75,800) (157,800) (12,000) 0 X (17,000) (29,000) (20,720) (4,960) 0 x (15,760) 0 35,316 35,316 Less: Depreciation Expense Less: Interest Expenses Income from Soul Company Stock Consolidated Net Income NCI in Net Income Controlling Interest in Net 0 72,516 40,276 71,480 39,240 0 40,276 71,480 72,516 39,240 Statement of Retained Earnings Beginning Balance Net Income 72,516 39,240 40,276 71,480 Less: Dividends Declared Ending Balance 72,516 39,240 40,276 0 71,480 Balance Sheet Assets Cash and Accounts Receivable 36,000 50,600 86,600 173,000 94,000 267,000 416,000 247,000 663,000 Inventory Buildings & Equipment Less: Accumulated Depreciation Investment in Soul Company Bonds Investment in Soul Company Stock (126,000) (66,000) (192,000) 97,600 97,600 0 102,816 102,816 Total Assets 699,416 325,600 97,600 927,416 Liabilities & Equity Investment in Soul Company Bonds 97,600 97,600 0 Investment in Soul Company Stock 102,816 102,816 Total Assets 699,416 325,600 97,600 927,416 Liabilities & Equity Current Payable 132,900 113,760 246,660 Bonds Payable 196,000 96,000 96,000 196,000 Bond Premium 1,600 1,600 0 Common Stock 101,000 61,000 61,000 101,000 72,516 Retained Earnings 39,240 40,276 0 NCI in NA of Soul Company Total Liabilities & Equity 311,600 198,876 0 502,416 543,660