Salt Corporation reported retained earnings of $75,000 at the date of acquisition. The difference between the acquisition price and underlying book value is assigned to buildings and equipment with a remaining economic life of five years from the date of acquisition. Required: 1) Give the appropriate consolidating entry or entries needed to prepare a consolidated balance sheet as of December 31, 20X7. 2) Prepare a consolidated balance sheet worksheet as of December 31, 20X7.

Pepper Company acquired all of Salt Corporation's stock on January 1, 20X6 for $150,000 cash. On December 31, 20X7, the balance sheets of the two companies showed the following amounts: Salt Corporation $ 25,000 30,000 45,000 200,000 (80,000) Cash Accounts Receivable Land Buildings and Equipment Less: Accumulated Depreciation Investment in Salt Corporation Total Assets Accounts Payable Taxes Payable Notes Payable Common Stock Retained Earnings Total Liabilities and Equity Pepper Company $ 55,000 60,000 80,000 300,000 (150,000) 155,000 $ 500,000 $ 40,000 20,000 75,000 100,000 265,000 $ 500,000 $220,000 $ 15,000 15,000 50,000 50,000 90,000 $220,000