7 On January 1, 2019, Alpha acquired 80 percent of Delta. Of Delta's total business fair value, $207,000 was allocated to copyrights with 20-year remaining life. Subsequently, on January 1, 2020, Delta obtained 70 percent of Omega's outstanding voting shares. In this second acquisition, $135,600 of Omega's total business fair value was assigned to copyrights that had a remaining life of 12 years. Delta's book value was $557,500 on January 1, 2019, and Omega reported a book value of $152,500 on January 1, 2020. 2.9 points Delta has made numerous inventory transfers to Alpha since the business combination was formed. Intra-entity gross profits of $20,700 were present in Alpha's inventory as of January 1, 2021. During the year, $247,000 in additional intra-entity sales were made with $27,170 in Intra-entity gross profits in inventory remaining at the end of the period. Both Alpha and Delta utilized the partial equity method to account for their investment balances. eBook Following are the individual financial statements for the companies for 2021 with consolidated totals. Print $ Alpha Company $(1,103,600) 547,000 383,000 (154,400) S (328,000) Delta Company (618,880) 318,000 158,000 (50,120) (193, 000) Omega Company $ (331,600) 164,000 96,000 0 $ (71,600) Consolidated Totals $(1,807,080) 788,470 658,650 0 References $ $ (359,960) 33,654 Sales Cost of goods sold Operating expenses Income of subsidiary Separate company net income Consolidated net income Net income attributable to noncontrolling interest (Delta Company) Net income attributable to noncontrolling interest (Omega Company) Net income attributable to Alpha Company Retained earnings, 1/1/21 Net income (above) Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in Delta Company Investment in Omega Company Property, plant, and equipment Copyrights Total assets Liabilities Comon stock Retained earnings, 12/31/21 Noncontrolling interest in Delta Company, 12/31/21 Noncontrolling interest in Omega Company, 12/31/21 Total liabilities and equities $ (702,500) (328,000) 50,000 $ $ (980,500) $ S 310,500 307,000 758,000 0 0 420,000 0 $ 1,795,500 $ (615,000) (200,000) (980,500) 0 0 $(1,795,500) $ (467,500) (193,000 40,000 $ $ (620,500) $ -15,790 452,500 0 258,790 517,500 0 $ 1,213,000 $ (472,500) (120,000) (620,500) 0 0 $(1,213,000) $ (112,500) (71,600) 50,000 $ (134, 100) $ 27, 100 218,000 0 0 0 338,000 0 $ 583, 100 $ (349,000) (100,000) (134,100) 0 0 $ (583, 100) 18,090 $ (308, 216) $ (663,052) (308,216) 50,000 $ $ (921,268) $ 321,810 950, 330 0 0 1,275,500 288,950 $ 2,836,590 $(1,436,500) (200,000) (921, 268) (174,692) (104,130) $(2,836,590) Note: Parentheses indicate a credit balance. Consolidation Worksheet Entries LIII Prepare Entry *C1 to convert to the equity method for Delta's acquisition. Note: Enter debits before credits. Transaction Accounts Debit Credit 2 6,470 Retained earnings (Delta) Investment in Omega 6,470 Record entry Clear entry view consolidation entries Consolidation Worksheet Entries IIII. Prepare Entry *C2 to convert to the equity method for Omega's acquisition. Note: Enter debits before credits. Transaction Accounts Debit Credit 3 Retained earnings (Alpha) Investment in Delta Record entry Clear entry view consolidation entries Consolidation Worksheet Entries Prepare Entry 11 to eliminate the intra-entity income accrual found on Alpha's records. Note: Enter debits before credits. Accounts Debit Credit Transaction 7 Income of subsidiary Investment in Delta Record entry Clear entry view consolidation entries Consolidation Worksheet Entries IIII. Prepare Entry 12 to eliminate the intra-entity income accrual found on Delta's records. Note: Enter debits before credits. Transaction Accounts Debit Credit 8 Income of subsidiary Investment in Omega Record entry Clear entry view consolidation entries Consolidation Worksheet Entries Prepare Entry E to recognize the current year amortization. Note: Enter debits before credits. Transaction Accounts Debit Credit 11 Record entry Clear entry view consolidation entries Consolidation Worksheet Entries 1 7 8 9 10 11 12 13 Prepare Entry TI to eliminate the intra-entity inventory transfer. Note: Enter debits before credits. Transaction Accounts Debit Credit 12 Record entry Clear entry view consolidation entries Consolidation Worksheet Entries 1 6 7 8 9 10 11 12 13 IIII Prepare Entry G to defer the ending intra-entity gross profit on the intra-entity transfers. Note: Enter debits before credits. Transaction Accounts Debit Credit 13 Record entry Clear entry view consolidation entries