Proud Corporation acquired 80 percent of Stergis Companyâ€™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:
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.