Punk Corporation purchased 80 percent of Soul Corporation’s stock on January 1, 20X2. At that date, Soul reported retained earnings of $80,000 and had $120,000 of stock outstanding. The fair value of its buildings was $32,000 more than the book value. Punk paid $190,000 to acquire the Soul shares. At that date, the noncontrolling interest had a fair value of $47,500. The remaining economic life for all Soul’s depreciable assets was eight years on the date of combination. The amount of the differential assigned to goodwill is not impaired. Soul reported net income of $40,000 in 20X2 and declared no dividends.

Required

a. Give the consolidation entries needed to prepare a consolidated balance sheet immediately after Punk purchased Soul stock.

b. Give all consolidation entries needed to prepare a full set of consolidated financial statements for 20X2.