Plaza Corporation purchased 70 percent of Square Company's voting common stock on January 1, 20X9, for $304,500. On that date, the noncontrolling interest had a fair value of $130,500 and the book value of Square's net assets was $399,000. The book values and fair values of Square's assets and liabilities were equal except for land that had a fair value $14,000 higher than book value. The amount attributed to goodwill as a result of the acquisition is not amortized and has not been impaired. PLAZA CORPORATION AND SQUARE COMPANY Trial Balance Data December 31, 20X9
Plaza Corporation Square Company
Item Debit Credit Debit Credit
Cash and Receivables $91,300 $95,000
Inventory 202,000 124,000
Land, Buildings, & Equipment (net) 276,000 256,000
Investment in Square Company 309,508
Cost of Goods & Services 192,000 142,000
Depreciation Expense 36,000 26,000
Dividends Declared 31,000 4,000
Sales & Service Revenue $311,000 $211,000
Income from Square Company 38,208
Accounts Payable 55,000 25,000
Common Stock 184,000 162,000
Retained Earnings 549,600 249,000
Total $1,137,808 $1,137,808 $647,000 $647,000

On January 1, 20X9, Plaza's inventory contained $34,000 of unrealized intercompany profits recorded by Square. Square's inventory on that date contained $15,000 of unrealized intercompany profits recorded on Plaza’s books. Both companies sold their ending 20X8 inventories to unrelated companies in 20X9.

During 20X9, Square sold inventory costing $53,000 to Plaza for $78,000. Plaza held all inventory purchased from Square during 20X9 on December 31, 20X9. Also during 20X9, Plaza sold goods costing $58,200 to Square for $97,000. Square continues to hold $32,980 of its purchase from Plaza on December 31, 20X9. Assume Plaza uses the fully adjusted equity method.

Required:
a. Prepare all consolidation entries needed to complete a consolidation worksheet as of December 31, 20X9
b. Record the basic consolidation entry.
c. Record the excess value differential) reclassification.
d. Record the entry to reverse last year's deferral.
e. Record the deferral of this year's unrealized profits on inventory transfers.