Trial balance data for Light Corporation and Star Company on December 31, 20X6, are as follows:

Light acquired all of Star's shares on January 1, 20X5, for $220,000, which was equal to the fair value of Star as a whole. Star's retained earnings balance at the date of acquisition was $50,000. The full purchase differential is assigned to goodwill. At December 31, 20X5, the management of Light reviewed the amount attributed to goodwill and concluded goodwill had been impaired and should be reported at $8,000. No further impairment occurred during 20X6. Light uses the cost method in accounting for its investment in Star.

Required 

Present all eliminating entries needed to prepare consolidated financial statements for the year 20X6, and prepare a three-part consolidation workpaper in good form as of December 31, 20X6.

Transcribed Image Text:

Item Cash and Receivables Inventory Land Buildings and Equipment Investment in Rapid Delivery Stock Cost of Goods Sold Depreciation Expense Wage Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Dividend Income Samuelson Company Debit $ 141,000 240,000 80,000 500,000 120,000 500,000 25,000 45,000 30,000 50,000 Credit $ 155,000 70,000 200,000 Rapid Delivery Corporation Debit $ 80,000 100,000 20,000 150,000 250,000 15,000 35,000 40,000 20,000 300,000 290,000 700,000 16,000 $1,731,000 $1,731,000 $710,000 Credit $ 75,000 35,000 50,000 50,000 100,000 400,000 $710,000