Using the data presented in P5-32, prepare a solution as if the business combination occurred prior to the effective date of FASB 141R.

P5-32,

Power Corporation acquired 75 percent of Best Company's ownership on January 1, 20X8, for $96,000. At that date, the fair value of the noncontrolling interest was $32,000. The book value of Best's net assets at acquisition was $100,000. The book values and fair values of Best's assets and liabilities were equal, except for Best's buildings and equipment, which were worth $20,000 more than book value. Buildings and equipment are depreciated on a 10-year basis.

Although goodwill is not amortized, the management of Power concluded at December 31, 20X8, that goodwill from its purchase of Best shares had been impaired and the correct carrying amount was $2,500. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders.

Required

a. Give all eliminating entries needed to prepare a three-part consolidation workpaper as of December 31, 20X8. 

b. Prepare a three-part consolidation workpaper for 20X8 in good form. 

Item Cash Accounts Receivable Inventory Land Buildings and Equipment Investment in Best Co. Stock Power Corporation Debit Credit $ 68,500 85,000 97,000 50,000 350,000 111,000 Best Company Debit $ 32,000 14,000 24,000 25,000 150,000 Credit