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Palermo Inc. purchased 80 percent of the outstanding stock of Salina Ranching Company, located in Australia, on January 1, 20X3. The purchase price in Australian dollars (A$) was A$200,000, and A$40,000 of the differential was allocated to plant and equipment, which is amortized over a 10-year period. The remainder of the differential was attributable to a patent. Palermo Inc. amortizes the patent over 10 years. Salina Ranchings trial balance on December 31, 20X3, in Australian dollars is as follows:

Assume that the Australian dollar (A$) is the functional currency and that Palermo uses the fully adjusted equity method for accounting for its investment in Salina Ranching. A December 31, 20X3, trial balance for Palermo Inc. follows.

Item	Debits			Credits
Cash	$	38,000
Accounts Receivable (net)		140,000
Receivable from Salina Ranching		6,480
Inventory		128,000
Plant & Equipment		500,000
Investment in Salina Ranching		152,064
Cost of Goods Sold		600,000
Depreciation Expense		28,000
Operating Expenses		204,000
Interest Expense		2,000
Dividends Declared		50,000
Translation Adjustment		22,528
Accumulated Depreciation				$	90,000
Accounts Payable					60,000
Interest Payable					2,000
Common Stock					500,000
Retained Earnings, January 1, 20X3					179,656
Sales					1,000,000
Income from Subsidiary					39,416
Total	$	1,871,072		$	1,871,072

Additional Information:

1. Salina Ranching uses average cost for cost of goods sold. Inventory increased by A$20,000 during the year. Purchases were made uniformly during 20X3. The ending inventory was acquired at the average exchange rate for the year.
2. Plant and equipment were acquired as follows: January 20X1 A$180,000 /January 1, 20X3 60,000
3. Plant and equipment are depreciated using the straight-line method and a 10-year life with no residual value.
4. The payable to Palermo is in Australian dollars. Palermos books show a receivable from Salina Ranching of $6,480.
5. The 10-year bonds were issued on July 1, 20X3, for A$106,000. The premium is amortized on a straight-line basis. The interest is paid on April 1 and October 1.
6. The dividends were declared and paid on April 1.
7. Exchange rates were as follows:

8. A$					$
   January 20X1	1		=			0.93
   August 20X1	1		=			0.88
   January 1, 20X3	1		=			0.70
   April 1, 20X3	1		=			0.67
   July 1, 20X3	1		=			0.64
   December 31, 20X3	1		=			0.60
   20X3 average	1		=			0.65

   Prepare a set of consolidating entries, in general journal form, for the entries required to prepare a comprehensive consolidation worksheet (including other comprehensive income) as of December 31, 20X3. PLEASE ASSIST IN ANY AND ALL PARTS! I WILL UPVOTE AS SOON AS ITS ANSWERD CORRECTLY! ONE OR MORE PEOPLE CAN ANSWER!!!!!!!!!!!!!!!

Credits Debits A$ 44,100 72, eee 86,800 240, eee Cash Accounts Receivable (net) Inventory Plant and Equipment Accumulated Depreciation Accounts Payable Payable to Palermo Inc. Interest Payable 12% Bonds Payable Premium on Bonds Common Stock Retained Earnings Sales Cost of Goods Sold Depreciation Expense Operating Expenses Interest Expense Dividends Paid Total A$ 60, ese 53,800 10,800 3,000 100,00 5,700 99,00 40, e 579,800 330, eee 24, eee 131,500 5,700 9, eee A$942,300 A$942,300 Answer is not complete. No Entry Accounts Debit Credit A 1 Common stock 83,000 Retained earnings 28,000 45,658 11,414 Income from Salina Ranching NCI in Nl of Salina Ranching Dividends declared Investment in Salina Ranching NCI in NA of Salina Ranching 8.030 113.632 28,408 C 3 5.600 X 2.800 Amortization expense Depreciation expense Income from Salina Ranching NCI in Nl of Salina Ranching OOO D 4 28,000 X 50,400 OOO Plant and equipment Patent Accumulated depreciation Investment in Salina Ranching NCI in NA of Salina Ranching x x 2.800 X 60,480 X 15.120 x E 5 8,480 > Payable to Palermo Receivable from Salina Ranching SIS 6.480 Consolidated IS 0 $ 0 $ 0 PALERMO INC. AND SUBSIDIARY Consolidation Financial Statement Worksheet December 31, 20X3 Consolidation Entries Palermo Salina DR CR Ranching Income Statement Sales Less: COGS Less: Depreciation Expense Less: Amortization Expense Less: Operating Expense Less: Interest Expense Income from Salina Ranching Consolidated Net Income IS 0 IS 0 IS 0 IS 0 NCI in Net Income Controlling Interest in Net Income $ 0 $ 0 S 0 $ 0 Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance 0 $ 0 S 0 0 Balance Sheet Assets Cash Accounts receivable Receivable from Salina Ranching Inventory Plant & Equipment Less: Accumulated Depreciation Patent Investment in Salina Ranching Total Assets $ 0 $ 0 $ $ 0 Liabilities & Stockholders' Equity Accounts payable Payable to Palermo Interest Payable Bonds Payable Premium on Bonds Common Stock Retained Earnings Accumulated OCI NCI in NA of Salina Ranching Total Liabilities & Equity S 0 S 0 S 0 S 0 Other Comprehensive Income Accumulated Other Comprehensive Income, 1/1/20X3 Other Comp. Income - Translation Adjustment Other Comprehensive Income to NCI Accumulated Other Comprehensive 5 0 S 0 s 0 S 0 Income, 12/31/20X3 0 S 0 0 S 0 0 S 0

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