Master Corporation acquired 80 percent ownership of Stanley Wood Products Company on January 1, 20X1, for $160,000. On that date, the fair value of the noncontrolling interest was $40,000, and Stanley reported retained earnings of $50,000 and had $100,000 of common stock outstanding. Master has used the equity method in accounting for its investment in Stanley.

Trial balance data for the two companies on December 31, 20X5, are as follows:

Additional Information
1. On the date of combination, the fair value of Stanley’s depreciable assets was $50,000 more than book value. The differential assigned to depreciable assets should be written off over the following 10-year period.
2. There was $10,000 of intercorporate receivables and payables at the end of 20X5.

Required
a. Give all journal entries that Master recorded during 20X5 related to its investment in Stanley.
b. Give all elimination entries needed to prepare consolidated statements for 20X5.
c. Prepare a three-part worksheet as of December 31,20X5.

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Stanley Wood Master Corporation Products Company Credit ltem Debit Credit Debit $81,000 260,000 80,000 500,000 188,000 120,000 25,000 15,000 30,000 65,000 90,000 80,000 150,000 Cash & Receivables Inventory Land Buildings & Equipment Investment in Stanley Wood Products Stock Cost of Goods Sol Depreciation Expense Inventory Losses Dividends Declared Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Income from Subsidiary 50,000 15,000 5,000 10,000 $ 205,000 60,000 200,000 300,000 314,000 200,000 20,000 $105,000 20,000 50,000 100,000 90,000 100,000 $1,299,000 $1,299,000 $465,000 $465,000