Clean Air Products owns 80 percent of the stock of Superior FilterCompany, which it acquired at underlying book value on August 30,20X6. At that date, the fair value of the noncontrolling interestwas equal to 20 percent of the book value of Superior Filter.Summarized trial balance data for the two companies as of December31, 20X8, are as follows:
| Clean Air Products | | | | | | | Superior Filter Company | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Debit | | | | Credit | | | | Debit | | | | | Credit | |
| Cash and AccountsReceivable | $ | 148,000 | | | | | | | $ | 94,000 | | | | |
| Inventory | | 221,000 | | | | | | | | 126,000 | | | | |
| Buildings &Equipment (net) | 275,000 | | | | | | | | 184,000 | | | | |
| Investment inSuperior Filter Stock | 263,200 | | | | | | | | | | | | |
| Cost of GoodsSold | | 173,000 | | | | | | | | 138,000 | | | | |
| DepreciationExpense | 35,000 | | | | | | | | 25,000 | | | | |
| CurrentLiabilities | | | | | $ | 163,400 | | | | | | | $ | 60,000 |
| Common Stock | | | | | | 191,000 | | | | | | | | 82,000 |
| RetainedEarnings | | | | | | 452,000 | | | | | | | | 211,000 |
| Sales | | | | | | | 264,000 | | | | | | | | 214,000 |
| Income fromSubsidiary | | | | | 44,800 | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Total | | $ | 1,115,200 | | | $ | 1,115,200 | | | $ | 567,000 | | | $ | 567,000 |
On January 1, 20X8, Clean Air's inventory contained filterspurchased for $67,000 from Superior Filter, which had produced thefilters for $47,000. In 20X8, Superior Filter spent $107,000 toproduce additional filters, which it sold to Clean Air for$157,000. By December 31, 20X8, Clean Air had sold all filters thathad been on hand January 1, 20X8, but continued to hold ininventory $47,100 of the 20X8 purchase from Superior Filter.
Required:
a.
Prepare all consolidation entries needed to complete aconsolidation worksheet for 20X8. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.)
*Record the basic consolidation entry.
*Record the entry to reverse last year's deferral.
*Record the entry to defer the current year's unrealized profitson inventory transfers.
b.
Compute consolidated net income and income assigned to thecontrolling interest in the 20X8 consolidated income statement.
c.
Compute the balance assigned to the noncontrolling interest inthe consolidated balance sheet as of December 31, 20X8.
