Portfolio Corporation acquired 70 percent ownership of Index Company on January 1,2006,at underlying book value.At that date,the fair value of the noncontrolling interest was equal to 30 percent of the book value of Index.On January 1,2008,Portfolio sold 1,000 shares of Index Company for $20,000 to Adventure Corporation and recorded a $5,000 gain.Trial balances for the companies on December 31,2008,contain the following data:
Index Company's net income was earned evenly throughout the year.Both companies declared and paid their dividends on December 31,2008.Portfolio uses the basic equity method in accounting for its investment in Index.
Required:
1)Prepare the elimination entries needed to complete a full consolidation workpaper for 2008.
2)Prepare a consolidation workpaper for 2008.

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The Answer of Portfolio Corporation acquired 70 percent ownership of Index Company on January 1,2006,at underlying book value.At that date,the fair value of the noncontrolling interest was equal to 30 percent of the book value of Index.On January 1,2008,Portfolio sold 1,000 shares of Index Company for $20,000 to Adventure Corporation and recorded a $5,000 gain.Trial balances for the companies on December 31,2008,contain the following data:
Index Company's net income was earned evenly throughout the year.Both companies declared and paid their dividends on December 31,2008.Portfolio uses the basic equity method in accounting for its investment in Index.
Required:
1)Prepare the elimination entries needed to complete a full consolidation workpaper for 2008.
2)Prepare a consolidation workpaper for 2008.

Portfolio Corporation Acquired 70 Percent Ownership of Index Company on January