Lintner Corporation purchased 80 percent of Knight Company's voting stock on January 1, 20X6, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Knight. Lintner uses the cost method in accounting for its investment in Knight. Knight reported $50,000 of retained earnings at the time of acquisition. Trial balance data for the two companies on December 31, 20X7, are as follows:

Required 

a. Prepare eliminating entries as of December 31, 20X7, for a full set of consolidated statements. 

b. Prepare a three-part consolidation workpaper as of December 31, 20X7. 

c. Prepare a consolidated income statement, balance sheet, and retained earnings statement for 20X7. 

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Item Cash Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Investment in Darla Corporation Stock Total Assets Cameron Corporation $ 65,000 90,000 130,000 60,000 410,000 (150,000) 87,500 $692,500 Darla Corporation $ 21,000 44,000 75,000 30,000 250,000 (80,000) $340,000