Purple Manufacturing purchased 60 percent of the ownership of Socks Corporation stock on January 1, 20X1, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 40 percent of the book value of Socks Corporation. Purple also purchased $60,000 of Socks bonds at par value on December 31, 20X3. Socks sold the bonds on January 1, 20X1, at 140; they have a stated interest rate of 12 percent. Interest is paid semiannually on June 30 and December 31. Assume Purple uses the fully adjusted equity method. On December 31, 20X1, Socks sold a building with a remaining life of 15 years to Purple for $30,000. Socks had purchased the building 10 years earlier for $40,000. It is being depreciated based on a 25-year expected life. Trial balances for the two companies on December 31 20X3, are as follows:

	Purple Manufacturing								Socks Corporation
Item	Debit				Credit				Debit				Credit
Cash	$	54,000							$	50,000
Accounts Receivable		299,800								221,200
Inventory		100,000								91,000
Investment in Socks Bonds		60,000
Investment in Socks Stock		161,160
Depreciable Assets (net)		300,000								260,000
Interest Expense		19,000								19,000
Operating Expenses		286,200								101,000
Dividends Declared		40,000								8,000
Accounts Payable					$	104,200							$	58,000
Bonds Payable						240,000								240,000
Bond Premium														67,200
Common Stock						310,000								110,000
Retained Earnings						155,640								55,000
Sales						440,000								220,000
Income from Socks Corp.						70,320
Total	$	1,320,160			$	1,320,160			$	750,200			$	750,200

Required: a. Prepare a consolidation worksheet for 20X3 in good form. (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. Do not round the intermediate calculations. Round the final answers to nearest dollar amount.)

b. Prepare a consolidated balance sheet, income statement, and statement of changes in retained earnings for 20X3. (Do not round the intermediate calculations. Round the final answers to nearest dollar amount.)