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On January 1, 20X8, Gregory Corporation acquired 90 percent of Nova Company's voting stock, at underlying...

On January 1, 20X8, Gregory Corporation acquired 90 percent of Nova Company's voting stock, at underlying book value. The fair value of the noncontrolling interest was equal to 10 percent of the book value of Nova at that date. Gregory uses the equity method in accounting for its ownership of Nova. On December 31, 20X8, the trial balances of the two companies are as follows:

Gregory Corp

Nova Company

Dr

Cr

Dr

Cr

Current Assets

200000

120000

Depreciable Assets

300000

225000

Investment in Nova

139500

Depreciation Expense

30000

25000

Other Expenses

100000

60000

Dividends Declared

30000

10000

Accumulated Depreciation

120000

75000

Current Liabilities

62000

25000

Long-Term Debt

75000

90000

Common Stock

100000

75000

Retained Earnings

120000

65000

Sales

300000

110000

Income from Subsidiary

22500

               Totals

799500

799500

440000

440000

Provide all consolidating entries required as of December 31, 20X8 to prepare consolidated financial statements.

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