Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2015, for $802,720 cash. At the acquisition date, Sierra€™s total fair value, including the noncontrolling interest, was assessed at $1,003,400 although Sierra€™s book value was only $690,000. Also, several individual items on Sierra€™s financial records had fair values that differed from their book values as follows:

For internal reporting purposes, Padre, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2015, for both companies.

At year-end, there were no intra-entity receivables or payables.
Prepare a worksheet to consolidate the financial statements of these twocompanies.

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Book Value Fair Value Land Buildings and equipment 65,000 $290,000 (10-year remaining life) Copyright (20-year remaining life). Notes payable (due in 8 years). 287,000 122,000 (176,000) 263,000 216,000 (157,600) . Padre Sierra Revenues Cost of goods sold Depreciation expense Amortization expense nterest expense Equity in income of Sierra $(1,394,980) (684,900) 432,000 11,600 6,100 9,200 774,000 274,000 52,100 (177,120) $ (472,000) (226,000) $(1,275,000) (530,000) (472,000) (226,000) 65,000 $(1,487,000) (691,000) Net income Retained earnings, 1/1/15 Net income Dividends declarec 260,000 Retained earnings, 12/31/15 Current assets Investment in Sierra Land Buildings and equipment (net) Copyright $ 856,160 764,700 927,840 360,000 909,000 65,000 275,400 115,900 3,053,000 1,221,000 Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings (above). (275,000) (194,000) (541,000) 176,000) (300,000) 100,000) (60,000) (1,487,000) (691,000) $(3,053,000) $(1,221,000) (450,000) Total liabilities and equities