Prime Company holds 70 percent of Suspect Companys stock, acquired on January 1, 20X2, for $157,500. On the date of acquisition, Suspect reported retained earnings of $54,000 and $120,000 of common stock outstanding, and the fair value of the noncontrolling interest was $67,500. Prime uses the fully adjusted equity method in accounting for its investment in Suspect.

Trial balance data for the two companies on December 31, 20X7, are as follows:

Item	Prime Company	Suspect Company
Debit	Credit	Debit	Credit
Cash and Accounts Receivable	$ 163,000		$ 54,000
Inventory	242,000		102,000
Land	102,000		78,000
Buildings and Equipment	480,000		155,000
Investment in Suspect Company	204,200
Cost of Goods Sold	162,000		85,000
Depreciation and Amortization Expense	27,000		18,000
Other Expenses	21,000		12,000
Dividends Declared	64,000		36,000
Accumulated Depreciation		$ 233,900		$ 47,000
Accounts Payable		55,000		24,000
Bonds Payable		180,000		45,000
Common Stock		320,000		120,000
Retained Earnings		383,100		144,000
Sales		260,000		160,000
Income from Suspect Company		33,200
Total	$ 1,465,200	$ 1,465,200	$ 540,000	$ 540,000

Additional Information

1. At the date of combination, the book values and fair values of Suspects separately identifiable assets and liabilities were equal. The full amount of the increased value of the entity was attributed to goodwill. At December 31, 20X6, the management of Prime reviewed the amount attributed to goodwill as a result of its purchase of Suspect stock and recognized an impairment loss of $16,000. No further impairment occurred in 20X7.
2. On January 1, 20X5, Suspect sold land for $19,000 that had cost $10,000 to Prime.
3. On January 1, 20X6, Prime sold to Suspect equipment that it had purchased for $58,000 on January 1, 20X1. The equipment has a total 10-year economic life and was sold to Suspect for $37,500. Both companies use straight-line depreciation.
4. Intercompany receivables and payables total $5,000 on December 31, 20X7.

Required:

a. Prepare a reconciliation between the balance in Primes Investment in Suspect Company account reported on December 31, 20X7, and Suspects book value.

Note: Enter the proportion of stock held as a fraction (i.e., 0.75), not in percent.

b-1. Prepare all worksheet consolidation entries needed as of December 31, 20X7.

Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

b-2. Complete a three-part consolidation worksheet for 20X7.

Note: Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.