Question 3 22 pts 3 Intercompany Transfer of Inventory Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2 for $108,500. At that date, the noncontrolling interest had a fair value of $46,500 and Soda reported $70.000 of common stock outstanding and retained earnings of $30,000. The differential is assigned to buildings and equipment, which had a fair value $20,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $35.000 higher than book value and a remaining life of five years at the date of the business combination. Trial balances for the companies as of December 31. 20x3, are as follows: Pop Corporation Soda Company Item Debit Credit Debit Credit Cash & Accounts Receivable $ 15,400 $ 21,600 Inventory 165,000 35,000 Land 80,000 40.000 340.000 Buildings & Equipment 260.000 Investment in Soda Company 109.600 Cost of Goods Sold 186.000 79.800 Depreciation Expense 20,000 15,000 Interest Expense 16,000 5,200 Dividends Declared 30,000 15,000 Accumulated Depreciation $ 140,000 $ 80,000 Accounts Payable 92,400 35,000 Bonds Payable 200,000 100,000 Bond Premium 1,600 Common Stock 120.000 70.000 Retained Earnings 127.900 60.000 Sales 260.000 125.000 Other Income 13,000 Income from Sads Company 8.100 $.962,000 $962.000 $ 471,600 $ 471.600 On December 31, 20X2, Soda purchased inventory for $32,000 and sold it to Pop for $48.000. Pop resold $27,000 of the inventory (i.e. $27,000 of the $48.000 acquired from Soda) during 20x3 and had the remaining balance in inventory at December 31, 20X3. During 20x3. Soda sold inventory purchased for $60,000 to Pop for $90,000, and Pop resold all but $24.000 of its purchase. On March 10, 20X3, Pop sold inventary purchased for $15,000 to Soda for $30.000. Soda sold all but $7,600 of the inventory prior to December 31, 20X3. Assume Pop uses the fully adjusted equity method, that both companies use straight-line depreciation, and that no property, plant, and equipment has been purchased since the acquisition Required: a. Prepare all consolidation entries needed to prepare a full set of consolidated financial statements at December 31, 20x3, for Pop and Soda A (Basic Elimination Entry) (5 points) B Amortization& Depreciation eliminating (3 points) C (Building, Equipment. Accumul depreciation) 3 points) c (Building Equipment, Accumul depreciation.) (3 points) D Accumulated depreciation and Bldg/Equipment) (2 points) 4 E Intercorporate inventory elimination) (2 points) F Intercorporate Sales elimination) (2 points) b. What is the P's investment balance in S as of December 31, 20X3. (5 points) Edit Viewert Format Toolt Table 1200 paragraph BIA