On July 18, 2020, Patrone Holdings Ltd. paid $1,920,000 to purchase 90 percent of the common shares of Smirnoff Inc., and Smirnoff Inc. owes Patrone Holdings Ltd. $240,000 on a note payable. All historical cost amounts are equal to their fair market value on July 18, 2020. Immediately after the purchase, the two companies’ balance sheets were as follows:

Required

Prepare the consolidation worksheet.

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Patrone Smirnoff Eliminations Consolidated Holdings Ltd. Debit Credit Inc. Amounts Assets Cash 200,000 340,000 Accounts receivable, net 720,000 480,000 Note receivable from Smirnoff Inc. 240,000 Inventory 1,480,000 920,000 Investment in Smirnoff Inc. 1,920,000 Property, plant, and equipment, net 2,190,000 1,540,000 Goodwill Total assets 6,750,000 3,280,000 Liabilities and Shareholders' Equity Accounts payable 1,060,000 680,000 Notes payable 1,680,000 320,000 Note payable to Patrone Holdings Ltd. 240,000 Other liabilities 260,000 384,000 Common shares 1,540,000 1,060,000 Retained earnings 2,210,000 596,000 Total liabilities and shareholders' equity 6,750,000 3,280,000