The following information pertains to Titan Corporation and its two subsidiaries, Boat Corporation and Engine Corporation:
a. The three corporations are all in the same industry and their operations are homogeneous. Titan Corporation exercises control over the boards of directors of Boat Corporation and Engine Corporation and has installed new principal officers in both.
b. Boat Corporation has a retained earnings balance of $92,000 at January 1, 2017, and has income of $15,000 for the first three months of 2017 and $20,000 for the first six months of 2018.
c. Titan Corporation acquires 250 shares of fully participating Engine preferred stock for $7,000 and 14,000 shares of Engine common stock for $196,000 on January 2, 2018. Engine Corporation has a net income of $20,000 in 2018 and does not declare any dividends.
d. Engine Corporation€™s inventory includes $22,400 of merchandise acquired from Boat Corporation subsequent to July 2018, for which no payment has been made. Boat Corporation marks up the merchandise 40% on cost.
e. Titan Corporation acquires in the open market twenty-five $1,000, 6% bonds of Boat Corporation for $21,400 on January 1, 2015. Boat Corporation bonds mature December 31, 2020. Interest is paid each June 30 and December 31. Straight-line amortization is allowed on the basis of materiality.
f. The 2018 year-end balance in the investment in Boat Corporation stock account is composed of the items shown in the following schedule:

g. Titan Corporation does not properly adjust the prior 20% investment when it acquires the 60% interest on July 1, 2018.
h. The December 31, 2018, trial balances for the three corporations appear as follows:

Required
1. Prepare any adjustment needed to the investment account as a result of the July 1, 2018, acquisition.
2. Prepare the worksheet necessary to produce the consolidated financial statements of Titan Corporation and its subsidiaries as of December 31, 2018. Correct the trial balances prior to consolidating. Consolidated retained earnings should be allocated to Titan Corporation, and the NCIs should be shown separately in the Consolidated Balance Sheet column. All supporting computations and schedules should be in good form.

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Date Description Amount Cost of 5,000 shares of Boat Corporation stock.. 71,400 (9,000) 12,000 April 1, 2017 20% of the dividends declared in December December 31, 2017 December 31, 2017 July 1, 2018 20% × 2017 annual net income of $60,000 for Boat December 31, 2018 December 31,2018 December 31, 2018 226,200 (24,000) 16,000 80% of the dividends declared in December 80% of the 201 8 June-December net income of Boat Corporation 87,000 210,000 90,000 Titan Corporation Engine Corporation 95,000 105,000 115,000 Advance to Boat Corporation . 17,000 24,000 325,000 (55,000) 470,000 (160,000) Investment in Boat Corporation: 696 Bonds. 23,800 Investment in Engine Corporation 7,400 (45,000) (170,000) (14,000) (96,000) Notes Payable (44,000) (86,000) (125,000) 8,000 (22,000) (30,000) (50,000) (200,000) (100,000) (650,000) er kevenue. (2,100) Subsidiary Income Common Stock-Boat . (16,000) (400) (11,200) 300,000 160,000 30,000 0 400,000 230,000 22,000 0 Totals. 0