2nd requirment

Use Chapter 4 Problem 40 on Page 206 to 1. prepare the consolidation worksheet entries for December 31, 2021 2. prepare the consolidation worksheet entries for December 31, 2022. Assuming during 2022, Sierra reports net income of 200,000 and paid dividends of 70,000 40. Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2021, 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 valor was only $690.000 Abo, several individual items on Sierra's financial records had fair values that differed from their book values as follows: Book Value Fair Value Land $ 65,000 $ 290,000 Buildings and equipment (10year remaining life) 287,000 263.000 Copyright (20-year remaining life) 122,000 216.000 Notes payable (due in 8 years) (176,000) (157.600) 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, 2021, for both companies Page 20 Sierra $ (684,900) Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra Net income Retained carning 1/1/21 Net income Dividends declared Retained earnings 12/31/21 Current assets Padre $(1.194.980) 774,000 274,000 0 52.100 (177.120) 5.472.000 $(1.275.000) (472.000) 260.000 1487.000) $ 56.160 432.000 11,600 6.100 9.200 -0- $1226.000) $ (530.000) (226,000) 05.000 $ (691.000 $ 754,700 A Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra Net Income Retained earnings 1/1/21 Net income Dividends declared Retained earnings, 12/30/21 Current assets Investment in Sierra Land Buildings and equipment (net) Copyright Total assets Accounts payable Notes payable Common stock Additional paid is capital Retained carings (above) Total liabilities and equities Padre ${1,994.980) 774,000 274,000 0 52,100 (177120) $ 472.000) 5(1.275,000) (472,000) 260.000 SC1487000) S 856.160 927,840 360.000 909.000 -0. $3053.000 $ (275.000) (541.000) (100,000) (450,000) 1487.000 $3.03.200) Sierra $ (684.900) 432,000 11,600 6,100 9.200 -0- $226,000) $ (530,000) (226,000) 65.000 5.691.000 $ 764,700 -0- 65.000 275,400 115.000 S 1221.000 $ (194000) (176.000) (100,000) (60,000) (691.000) S01 221.000