The individual financial statements for Abbey Company and Bellstar Company for the year ending December 31, 2024, follow. Abbry acquired a 60 percent interest in Bellstar on January 1, 2023, in exchange for various considerations totaling $660,000. At the acquisition date, the fair value of the noncontrolling interest was $440,000 and Bellstar's book value was $880,000. Bellstar had developed internally a trademark that was not recorded on its books but had an acquisition-date fair value of $220,000. This intangible asset is being amortized over 20 years.

The individual financial statements for Abbey Company and Bellstar Company for the year ending December 31, 2024, follow. Abbey acquired a 60 percent interest in Bellstar on January 1,2023, in exchange for various considerations totaling $660,000. At the acquisition date, the fair value of the noncontrolling interest was $440,000 and Bellstar's book value was $880,000. Bellstar had developed intemally a trademark that was not recorded on its books but had an acquisition-date fair value of $220,000. This intangible asset is being amortized over 20 years. Abbey uses the partial equity method to account for its investment in Bellstar. Abbey sold Bellstar land with a book value of $60,000 on January 2,2023 , for $130,000. Bellstar still holds this land at the end of the current year. Bellstar regularly transfers inventory to Abbey. In 2023, it shipped inventory costing $162,000 to Abbey at a price of $270,000. During 2024 , intra-entity shipments totaled $320,000, although the original cost to Bellstar was only $224,000. In each of these years, 20 percent of the merchandise was not resold to outside parties until the period following the transfer. Abbey owes Bellstar $65,000 at the end of 2024. Note: Parentheses indicate a credit balance. Consolidation Worksheet Entries 2 Prepare Entry *TA to defer the intra-entity gain as of the beginning of the year. Note: Enter debits before credits. Note: Parentheses indicate a credit balance. Required: a. Prepare a worksheet to consolidate the separate 2024 financial statements for Abbey and Belistar: b. How would the consolidation entries in requirement (a) have differed if Abbey had sold a bulding on January 2, 2023, with a $120,000 book value (cost of $260,000 ) to Bellstar for $220,000 instead of land, as the problem reports? Assume that the building had a to-yeat remaining life at the date of transfer. \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline ACcounts & \multicolumn{2}{|r|}{ Avoey } & \multicolumn{2}{|c|}{ Denstar } & \multicolumn{2}{|r|}{ vepit } & \multirow{2}{*}{ creait } & \multirow[t]{2}{*}{ Interest } & \multicolumn{2}{|c|}{ Totals } \\ \hline Sales & $ & (920,000) & $ & (620,000) & $ & 320.000 & & & $ & 1,220,000 \\ \hline Cost of goods sold & & 620,000 & & 420,000 & & & & & & 1,040,000 \\ \hline Operating expenses & & 110,000 & & 85,000 & & & & & & \\ \hline Equity in earnings of Bellstar & & (69,000) & & 0 & & 69,000 & & & & 0 \\ \hline Separate company net income & $ & (259,000) & $ & (115,000) & & & & & & \\ \hline \multicolumn{11}{|l|}{ Consolidated net income } \\ \hline \multicolumn{11}{|l|}{ To noncontrolling interest } \\ \hline \multicolumn{11}{|l|}{ To Abbey Company } \\ \hline Retained earnings, Abbey, 1/1 & s & (1,236,000) & & & & & & & & \\ \hline Retained earnings, Bellstar, 1/1 & & & & (680,000) & & & & & & \\ \hline Net income & & (259,000) & & (115,000) & & & & & & \\ \hline Dividends declared & & 130,000 & & 30,000 & & & & & & \\ \hline Retained earnings, 12/31 & $ & (1,365,000) & $ & (765,000) & & & & & & \\ \hline Cash & s & 181,000 & $ & 80,000 & & & & & & \\ \hline Accounts receivable & & 380,000 & & 530,000 & & & & & & \\ \hline Inventory & & 510,000 & & 440,000 & & & & & & \\ \hline Investment in Bellstar & & 903,000 & & & & & & & & \\ \hline Land & & 230.000 & & 510,000 & & & & & & \\ \hline Buildings and equipment (net) & & 508.000 & & 420,000 & & & & & & \\ \hline \multicolumn{11}{|l|}{ Trademark } \\ \hline Total assets & 5 & 2.712,000 & s & 1,980,000 & & & & & & \\ \hline Liabilities: & $ & (637,000) & $ & (695,000) & & & & & & \\ \hline Common stock & & (710,000) & & (440,000) & & & & & & \\ \hline Additional paid-in capital & & & & (80,000) & & & & & & \\ \hline Retained earnings, 12/31 & & (1,365,000) & & (765,000) & & & & & & \\ \hline \multicolumn{11}{|l|}{ Noncontrolling interest 1/1} \\ \hline \multicolumn{11}{|l|}{ Noncontrolling interest 12/31} \\ \hline Total liabilities and equity & s & (2,712,000) & s & (1,980,000) & s & 389,000 & 5 & & & \\ \hline \end{tabular} Required B The individual financial statements for Abbey Company and Bellstar Company for the year ending December 31, 2024, follow. Abbey acquired a 60 percent interest in Bellstar on January 1,2023, in exchange for various considerations totaling $660,000. At the acquisition date, the fair value of the noncontrolling interest was $440,000 and Bellstar's book value was $880,000. Bellstar had developed intemally a trademark that was not recorded on its books but had an acquisition-date fair value of $220,000. This intangible asset is being amortized over 20 years. Abbey uses the partial equity method to account for its investment in Bellstar. Abbey sold Bellstar land with a book value of $60,000 on January 2,2023 , for $130,000. Bellstar still holds this land at the end of the current year. Bellstar regularly transfers inventory to Abbey. In 2023, it shipped inventory costing $162,000 to Abbey at a price of $270,000. During 2024 , intra-entity shipments totaled $320,000, although the original cost to Bellstar was only $224,000. In each of these years, 20 percent of the merchandise was not resold to outside parties until the period following the transfer. Abbey owes Bellstar $65,000 at the end of 2024. Note: Parentheses indicate a credit balance. Consolidation Worksheet Entries 2 Prepare Entry *TA to defer the intra-entity gain as of the beginning of the year. Note: Enter debits before credits. Note: Parentheses indicate a credit balance. Required: a. Prepare a worksheet to consolidate the separate 2024 financial statements for Abbey and Belistar: b. How would the consolidation entries in requirement (a) have differed if Abbey had sold a bulding on January 2, 2023, with a $120,000 book value (cost of $260,000 ) to Bellstar for $220,000 instead of land, as the problem reports? Assume that the building had a to-yeat remaining life at the date of transfer. \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline ACcounts & \multicolumn{2}{|r|}{ Avoey } & \multicolumn{2}{|c|}{ Denstar } & \multicolumn{2}{|r|}{ vepit } & \multirow{2}{*}{ creait } & \multirow[t]{2}{*}{ Interest } & \multicolumn{2}{|c|}{ Totals } \\ \hline Sales & $ & (920,000) & $ & (620,000) & $ & 320.000 & & & $ & 1,220,000 \\ \hline Cost of goods sold & & 620,000 & & 420,000 & & & & & & 1,040,000 \\ \hline Operating expenses & & 110,000 & & 85,000 & & & & & & \\ \hline Equity in earnings of Bellstar & & (69,000) & & 0 & & 69,000 & & & & 0 \\ \hline Separate company net income & $ & (259,000) & $ & (115,000) & & & & & & \\ \hline \multicolumn{11}{|l|}{ Consolidated net income } \\ \hline \multicolumn{11}{|l|}{ To noncontrolling interest } \\ \hline \multicolumn{11}{|l|}{ To Abbey Company } \\ \hline Retained earnings, Abbey, 1/1 & s & (1,236,000) & & & & & & & & \\ \hline Retained earnings, Bellstar, 1/1 & & & & (680,000) & & & & & & \\ \hline Net income & & (259,000) & & (115,000) & & & & & & \\ \hline Dividends declared & & 130,000 & & 30,000 & & & & & & \\ \hline Retained earnings, 12/31 & $ & (1,365,000) & $ & (765,000) & & & & & & \\ \hline Cash & s & 181,000 & $ & 80,000 & & & & & & \\ \hline Accounts receivable & & 380,000 & & 530,000 & & & & & & \\ \hline Inventory & & 510,000 & & 440,000 & & & & & & \\ \hline Investment in Bellstar & & 903,000 & & & & & & & & \\ \hline Land & & 230.000 & & 510,000 & & & & & & \\ \hline Buildings and equipment (net) & & 508.000 & & 420,000 & & & & & & \\ \hline \multicolumn{11}{|l|}{ Trademark } \\ \hline Total assets & 5 & 2.712,000 & s & 1,980,000 & & & & & & \\ \hline Liabilities: & $ & (637,000) & $ & (695,000) & & & & & & \\ \hline Common stock & & (710,000) & & (440,000) & & & & & & \\ \hline Additional paid-in capital & & & & (80,000) & & & & & & \\ \hline Retained earnings, 12/31 & & (1,365,000) & & (765,000) & & & & & & \\ \hline \multicolumn{11}{|l|}{ Noncontrolling interest 1/1} \\ \hline \multicolumn{11}{|l|}{ Noncontrolling interest 12/31} \\ \hline Total liabilities and equity & s & (2,712,000) & s & (1,980,000) & s & 389,000 & 5 & & & \\ \hline \end{tabular} Required B