3 3 Plaza, Inc., acquires 80 percent of the outstanding common stock of Stanford Corporation on January 1, 2021, in exchange for $955,900 cash. At the acquisition date, Stanford's total fair value, including the noncontrolling interest, was assessed at $1,194,875. Also at the acquisition date, Stanford's book value was $524,400. 9.09 points Several individual items on Stanford's financial records had fair values that differed from their book values as follows: Book Value $292,200 Fair Value $374,600 Trade names (indefinite life) Property and equipment (net, 8-year remaining life) Patent (14-year remaining life) eBook 236,800 120,400 254,400 161,000 Print For internal reporting purposes, Plaza, 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. References Revenues Cost of goods sold Depreciation expense Amortization expense Equity in income of Stanford Net income Plaza $ (828,400) 458,000 194,100 0 (293,600) $ (469,900) Stanford $ (746,400) 321,700 29,600 23,000 $ (372, 100) Retained earnings, 1/1/21 Net income Dividends declared $(1,036,500) (469,900) 243,900 $(1,262,500) $ (430,000) (372,100) 22,600 $ (780, 100) Retained earnings, 12/31/21 $ $ 350, 700 Current assets Investment in Stanford Trade names Property and equipment (net) Patents Total assets 698,900 1,231,900 195, 200 837,800 292,200 207,200 97,400 947,500 $ 2,963,800 $ Accounts payable Common stock Additional paid-in capital Retained earnings (above) Total liabilities and equities $ (115,600) (244,000) (1,341,700) (1,262,500) $(2,963,800 $ (73,000) (74,000) (20,400) (780, 100) $ (947,500) PLAZA CORPORATION AND STANFORD CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Noncontrolling Consolidated Accounts Plaza Stanford Debit Credit Interest Totals Revenues S (828,400) S (746,400) 458,000 321,700 194,100 29,600 23,000 (293,600) (469,900) S (372,100) S Cost of goods sold Depreciation expense Amortization expense Equity in income of Stanford Net income Consolidated net income NCI share of CNI Plaza share of CNI Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 S (1,036,500) S (430,000) (469,900) (372,100) 243,900 22,000 (1,262,500) S (780, 100) 698,900 S 350,700 S Current assets S 1,231,900 0 Investment in Stanford Tradenames Property and equipment (net) 195,200 292,200 837,800 207,200 Patents 0 97,400 Goodwill S 2,963,800 S 947,500 (115,600) (73,000) (244,000) (74,000) Total assets Accounts payable Common stock Additional paid-in capital Noncontrolling interest Retained earnings, 12/31 Total liabilities and equities (1,341,700) (20.400) (1,262,500) (780,100) (2,963,800) 5 (947,500) S S 0 S 0