Note: Parentheses indicate a credit balance.

Required:

a$.$ Prepare a worksheet to consolidate the separate $2024$ financial statements for Abbey and Bellstar.

b$.$ How would the consolidation entries in requirement $($a$)$ have differed if Abbey had sold a bullding on January $2,2023,$ with a

$$105,000$ book value $($cost of $$230,000)$ to Bellstar for $$190,000$ instead of land, as the problem reports? Assume that the building

had a $10-$year remaining life at the date of transfer.

Complete this question by entering your answers in the tabs below.

How would the consolidation entries in requirement $($a$)$ have differed if Abbey had sold a building on January $2,2023,$ with a

$$105,000$ book value $($cost of $$230,000)$ to Bellstar for $$190,000$ instead of land, as the problem reports? Assume that the

building had a $10-$year remaining life at the date of transfer.

Note: Do not round intermediate calculations. If no entry is required for a transaction$/$event$,$ select $"$No journal entry

required" in the first account field.The individual financial statements for Abbey Company and Bellstar Company for the year ending December $31,2024,$ follow. Abbey acquired a $60$ percent interest in Bellstar on January $1,2023,$ in exchange for various considerations totaling $$540,000.$ At the acquisition date, the fair value of the noncontrolling interest was $$360,000$ and Bellstar$$s book value was $$710,000.$ Bellstar had developed internally a trademark that was not recorded on its books but had an acquisition$-$date fair value of $$190,000.$ This intangible asset is being amortized over $20$ years. Abbey uses the partial equity method to account for its investment in Bellstar.

Abbey sold Bellstar land with a book value of $$90,000$ on January $2,2023,$ for $$180,000.$ Bellstar still holds this land at the end of the current year.

Bellstar regularly transfers inventory to Abbey. In $2023,$ it shipped inventory costing $$144,000$ to Abbey at a price of $$240,000.$ During $2024,$ intra$-$entity shipments totaled $$290,000,$ although the original cost to Bellstar was only $$203,000.$ In each of these years, $20$ percent of the merchandise was not resold to outside parties until the period following the transfer. Abbey owes Bellstar $$50,000$ at the end of $2024.$

Items Abbey Company Bellstar Company

Sales $ $(890,000)$ $ $(590,000)$

Cost of goods sold $590,000390,000$

Operating expenses $190,00070,000$

Equity in earnings of Bellstar $(78,000)0$

Net income $ $(188,000)$ $ $(130,000)$

Retained earnings, $1/1/24$ $ $(1,206,000)$ $ $(665,000)$

Net income $($above$)(188,000)(130,000)$

Dividends declared $115,00070,000$

Retained earnings, $12/31/24$ $ $(1,279,000)$ $ $(725,000)$

Cash $ $178,000$ $ $100,000$

Accounts receivable $374,000500,000$

Inventory $480,000410,000$

Investment in Bellstar $849,0000$

Land $200,000480,000$

Buildings and equipment $($net$)505,000390,000$

Total assets $ $2,586,000$ $ $1,880,000$

Liabilities $ $(627,000)$ $ $(655,000)$

Common stock $(680,000)(410,000)$

Additional paid$-$in capital $0(90,000)$

Retained earnings, $12/31/24(1,279,000)(725,000)$

Total liabilities and equities $ $(2,586,000)$ $ $(1,880,000)$

Note: Parentheses indicate a credit balance.

Required:

Prepare a worksheet to consolidate the separate $2024$ financial statements for Abbey and Bellstar.

How would the consolidation entries in requirement $($a$)$ have differed if Abbey had sold a building on January $2,2023,$ with a $$105,000$ book value $($cost of $$230,000)$ to Bellstar for $$190,000$ instead of land, as the problem reports? Assume that the building had a $10-$year remaining life at the date of transfer.