Reference no: EM131794267

Pauley Corporation paid $24,800 for an 80% interest in Shore Corporation on January 1, 2010, at which time Shore's stockholders' equity consisted of $15,000 of Common Stock and $6,000 Retained Earnings.  The fair values of Shore Corporation's assets and liabilities were identical to recorded book values when Pauley acquired its 80% interest.

Shore Corporation reported net income of $4,000 and paid dividends of $2,000 during 2010.

Pauley Corporation sold inventory items to Shore during 2010 and 2011 as follows:

                                                            2010                2011

Pauley's sales to Shore                       5,000               6,000

Pauley's cost of sales to Shore            3,000               3,500

Unrealized profit at year-end               1,000               1,500

At December 31, 2011, the accounts payable of Shore included $1,500 owed to Pauley.

Required: complete the consolidation working papers for Pauley Corporation and Subsidiary for the year ended December 31, 2011.  On a separate page, list the adjusting and elimination entries.  (Format should follow P 5-6 and P 5-7)

Also, prepare a T-account for the Investment in Sub and the Noncontrolling Interest with the  12/31/2010 and 12/31/2011 balances.