Post Delivery Service acquired at book value 80 percent of the voting shares of Script Real Estate Company. On that date, the fair value of the noncontrolling interest was equal to 20 percent of the Script’s book value. Script Real Estate reported common stock of $280,000 and retained earnings of $95,000. During 20X3, Post Delivery provided courier services for Script Real Estate in the amount of $21,000. Also during 20X3, Script Real Estate purchased land for $2,000. It sold the land to Post Delivery Service for $27,000 so that Post Delivery could build a new transportation center. Post Delivery reported $52,000 of operating income from its delivery operations in 20X3. Script Real Estate reported net income of $54,000 and paid dividends of $10,000 in 20X3.
(A) Compute consolidated net income for 20X3.
(B) Prepare all journal entries recorded by Post Delivery Service related to its investment in Script Real Estate assuming Post uses the fully adjusted equity method in accounting for the investment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
(C) Prepare all consolidation entries required in preparing a consolidation worksheet as of December 31, 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

When preparing consolidated Net Income, We add each and every line item on a Parent's financial statements with the same line item on the Subsidiary's financial statement and adjust line items like revenue ( intra-group sale) , cost of goods sold ( unrealized profits) , other incomes ( dividends received) and expenses (depreciation on profits) .

b) JOURNAL ENTRIES

Debit Common stock $ 280,000 Debit Retained Earnings $ 95,000 Credit investment $ 300,000 Credit Non_Controlling interest( N . C . I ) $ 75,000

c) Debit Service Revenue $ 21,000,Credit Service fee $ 21,000

Debit Gain or profits on sale of land $ 25,000 Credit Land $ 25,000

Debit Dividends received $ 8000, N . C . I $2000 Credit Dividends paid $ 10,000

Explanation:

The question is incomplete, it lacks the financial statements to be consolidated.

Steps to Consolidated Statements

1 . Eliminate common transactions ( transactions like intra-group sale , dividends , etc . .)

2 . Consolidate the financial statements

b) we credit investment and if investment is greater than the total of common stock and retained earnings at 80% then we create equity represented by goodwill ( asset ) , if investment is less the we set off that amount in the retained earnings of the investing company. (Assuming investment = 80 % of total amount at acquisition .