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Acme Corporation has been operating profitably since its creation in 1 9 9 8 . At the beginning of 2 0 2 2 , Acme

Acme Corporation has been operating profitably since its creation in 1998. At the beginning of 2022, Acme acquired a 70 percent ownership in Beta Company. At the acquisition date, Acme prepared the following fair-value allocation schedule:\table[[ACME CORPORATION AND CON SOLIDATED SUB SIDIARIES],[Consolidation Worksheet],[December 31,2024],[Accounts,\table[[Acme],[Corporation]],\table[[Beta],[Company]],\table[[Cade],[Company]],Consolidation Entries,\table[[Noncontrolling],[Interest]],\table[[Consolidated],[Balance]]],[Debit,Credit],[Sales and other revenue,(1,121,652),(831,640),390,400,,,,],[Cost of goods sold,623,000,382,000,227,000,,,,],[Operating expenses,301,000,288,000,90,000,,,,],[Income of Beta Company,(120,988),,,120,988,,,0],[Income of Cade Company,(29,360),(29,360),,58,720,,,0],[Net income,(348,000),(191,000),73,400,,,,],[Consolidated net income,,,,,,,0],[Net income attributable to noncontrolling interest (Beta)],[Net income attributable to noncontrolling interest (Cade)],[Net income attributable to Acme Corporation,,,,,,,0],[Retained earnings, 1/1/24:],[Acme Corporation,889,000,,,,,,889,000],[Beta Company,,602,000,,602,000,,,0],[Cade Company,,,233,000,233,000,,,0],[Net income,348,000,191,000,73,400,,,,348,000],[Dividends declared],[Acme Corporation,100,000,,,,,,100,000],[Beta Company,,96,000,,,,,0],[Cade Company,,,50,000,,,,0],[Retained earnings, 12/31/24,(1,137,000),(697,000),256,400,,,,1,137,000
Consideration transferred for 70% interest in Beta $ 763,000
Fair value of the 30% noncontrolling interest 327,000
Beta business fair value $ 1,090,000
Beta book value 739,000
Excess fair value over book value $ 351,000
Assignments to adjust Betas assets to fair value:
To buildings (20-year remaining life) $ 95,000
To equipment (4-year remaining life)(24,600)
To franchises (10-year remaining life)41,500
To trademarks (indefinite life)239,100351,000
0
Acme regularly buys inventory from Beta at a markup of 25 percent more than cost. Acme's purchases during 2022 and 2023 and related ending inventory balances follow:
Year Intra-Entity Purchases Remaining Intra-Entity Inventory End of Year (at transfer price)
2022 $ 112,500 $ 37,500
2023143,75057,500
During 2024, Acme acquired additional inventory from Beta at a price of $299,000. Of this merchandise, 45 percent is still held at year-end.
On January 1,2024, Acme and Beta acted together as co-acquirers of 80 percent of Cade Company's outstanding common stock. The total price of these shares was $306,400, indicating neither goodwill nor other specific fair-value allocations. Each company put up one-half of the consideration transferred.
Items Acme Corporation Beta Company Cade Company
Sales and other revenues $ (1,121,652) $ (831,640) $ (390,400)
Cost of goods sold 623,000382,000227,000
Operating expenses 301,000288,00090,000
Income of Beta Company (120,988)00
Income of Cade Company (29,360)(29,360)0
Net income $ (348,000) $ (191,000) $ (73,400)
Retained earnings, 1/1/24 $ (889,000) $ (602,000) $ (233,000)
Net income (above)(348,000)(191,000)(73,400)
Dividends declared 100,00096,00050,000
Retained earnings, 12/31/24 $ (1,137,000) $ (697,000) $ (256,400)
Cash and receivables $ 38,702 $ 146,440 $ 88,750
Inventory 434,750392,000125,450
Investment in Beta Company 925,98800
Investment in Cade Company 162,560162,5600
Buildings 451,000395,000201,000
Equipment 409,000166,00092,100
Land 225,000319,00018,100
Total assets $ 2,647,000 $ 1,581,000 $ 525,400
Liabilities $ (690,000) $ (574,000) $ (119,000)
Common stock (820,000)(310,000)(150,000)
Retained earnings, 12/31/24(1,137,000)(697,000)(256,400)
Total liabilities and equities $ (2,647,000) $ (1,581,000) $ (525,400)
Note: Parentheses indicate a credit balance.
Required:
Using the three companies financial records for 2024, prepare a consolidation worksheet. The equity method has been applied to each investment.
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