6 On January 1, 2019, Monica Company acquired 70 percent of Young Company's outstanding common stock for $784,000. The fair value of the noncontrolling interest at the acquisition date was $336,000. Young reported stockholders' equity accounts on that date as follows: 16.7 points Common stock-$10 par value Additional paid-in capital Retained earnings $ 100,000 80,000 640,000 eBook Print References In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a five-year remaining life) by $40,000. Any remaining excess acquisition-date fair value was allocated to a franchise agreement to be amortized over 10 years. During the subsequent years, Young sold Monica inventory at a 30 percent gross profit rate. Monica consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the three years after this business combination was created amounted to the following: Inventory Remaining Transfer at Year-End Price (at transfer price) $ 40,000 $ 33,000 60,000 35,000 70,000 41,000 Year 2019 2020 2021 In addition, Monica sold Young several pieces of fully depreciated equipment on January 1, 2020, for $59,000. The equipment had originally cost Monica $96,000. Young plans to depreciate these assets over a 5-year period. In 2021, Young earns a net income of $210,000 and declares and pays $70,000 in cash dividends. These figures increase the subsidiary's Retained Earnings to a $970,000 balance at the end of 2021. Monica employs the equity method of accounting. Hence, it reports $133,740 investment income for 2021 with an Investment account balance of $899,590. Prepare the worksheet entries required for the consolidation of Monica Company and Young Company. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) view transaction list 6 No Transaction Debit Credit 1 1 Accounts Retained earnings, 1/1/21 (Young) Cost of goods sold 10,500 10,500 16.7 points 2 2 47,200 Investment in Young Equipment Accumulated depreciation Equipment 37,000 84,200 3 3 No journal entry required 4 4 Common stock - Young Additional paid-in capital - Young Retained earnings, 1/1/21 (Young) Investment in Young Noncontrolling interest in Young 5 5 Buildings Franchise agreement Investment in Young Noncontrolling interest in Young 6 6 Investment income Investment in Young 7 7 Investment in Young Dividends declared 8 8 Depreciation expense Amortization expense 6 Noncontrolling interest in Young 5 5 16.7 points Buildings Franchise agreement Investment in Young Noncontrolling interest in Young OOOOO 6 6 Investment income Investment in Young OO 7 7 Investment in Young Dividends declared O 8 8 Depreciation expense Amortization expense Franchise agreement Buildings DO 9 9 Sales Cost of goods sold 10 10 Cost of goods sold Inventory 11 11 Accumulated depreciation-Equipment Depreciation expense