Pine Corporation acquired 70 percent of Bock Companys voting common shares on January 1, 20X2, for $108,500.

Pine Corporation acquired 70 percent of Bock Company’s voting common shares on January 1, 20X2, for $108,500. At that date, the noncontrolling interest had a fair value of $46,500 and Bock reported $70,000 of common stock outstanding and retained earnings of $30,000. The differential is assigned to buildings and equipment, which had a fair value $20,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $35,000 higher than book value and a remaining life of five years at the date of the business combination. Trial balances for the companies as of December 31, 20X3, are as follows:

On December 31, 20X2, Bock purchased inventory for $32,000 and sold it to Pine for $48,000. Pine resold $27,000 of the inventory (i.e., $27,000 of the $48,000 acquired from Bock) during 20X3 and had the remaining balance in inventory at December 31, 20X3.
During 20X3, Bock sold inventory purchased for $60,000 to Pine for $90,000, and Pine resold all but $24,000 of its purchase. On March 10, 20X3, Pine sold inventory purchased for $15,000 to Bock for $30,000. Bock sold all but $7,600 of the inventory prior to December 31, 20X3. Assume Pine uses the fully adjusted equity method, that both companies use straight-line depreciation, and that no property, plant, and equipment has been purchased since the acquisition.

Required
a. Give all elimination entries needed to prepare a full set of consolidated financial statements at December 31, 20X3, for Pine and Bock.
b. Prepare a three-part consolidation worksheet for20X3.

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Pine Corporation Debit Bock Company Debit Item Credit Credit $ 15,400 Cash & Accounts Receivable Inventory 21,600 35,000 40,000 165,000 80,000 340,000 109,600 186,000 20,000 16,000 30,000 Buildings & Equipment Investment in Bock Company Stock Cost of Goods Sold Depreciation Expense Interest Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Bond Premium Common Stock Retained Earnings Sales Other Income Income from Subsidiary 260,000 79,800 15,000 5,200 15,000 $140,000 92,400 200,000 S 80,000 35,000 100,000 1,600 70,000 60,000 125,000 120,000 127,900 260,000 13,600 8,100 $962,000 $962,000 $471,600 $471,600