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Police Corporation acquired 100 percent of Station Corporation's voting shares on January 1, 20X3, at...

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Accounting

Police Corporation acquired 100 percent of Station Corporation's voting shares on January 1, 20X3, at underlying book value. At that date, the book values and fair values of Station's assets and liabilities were equal. Police uses the equity method in accounting for its investment in Station. Adjusted trial balances for Police and Station on December 31, 20X3, are as follows:

Item Police Corporation Station Corporation
Debit Credit Debit Credit
Current Assets $ 156,000 $ 116,000
Depreciable Assets (net) 344,000 231,000
Investment in Station Corporation 138,000
Depreciation Expense 24,000 14,000
Other Expenses 104,000 74,000
Dividends Declared 45,000 22,000
Current Liabilities $ 40,000 $ 30,000
Long-Term Debt 113,000 179,000
Common Stock 192,000 84,000
Retained Earnings 222,000 34,000
Sales 202,000 130,000
Income from Station Corporation 42,000
$ 811,000 $ 811,000 $ 457,000 $ 457,000

Required:

Prepare the consolidation entry required on December 31, 20X3, to prepare consolidated financial statements.

Prepare a three-part consolidation worksheet as of December 31, 20X3.

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