Proud Corporation acquired 80 percent of Stergis Companys voting stock on January 1, 20X3, at underlying book

Proud Corporation acquired 80 percent of Stergis Company’s voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Stergis at that date. Proud uses the equity method in accounting for its ownership of Stergis during 20X3. On December 31, 20X3, the trial balances of the two companies are as follows:

Required
a. Give all elimination entries required as of December 31, 20X3, to prepare consolidated financial statements.
b. Prepare a three-part consolidation worksheet.
c. Prepare a consolidated balance sheet, income statement, and retained earnings statement for20X3.

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Proud Corporation Debit Stergis Company Debit tem Credit Credit $173,000 $105,000 300,000 Current Assets Depreciable Assets Investment in Stergis Company Stock Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities Long-Term Debt Common Stock Retained Earnings Sales Income from Subsidiary 500,000 136,000 25,000 15,000 75,000 10,000 40,000 $175,000 50,000 100,000 200,000 230,000 200,000 24,000 75,000 40,000 120,000 100,000 50,000 120,000 $979,000 $979,000 $505,000 $505,000