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:

Consideration transferred for $70\%$ interest in Beta $ $742,000$

Fair value of the $30\%$ noncontrolling interest $318,000$

Beta business fair value $ $1,060,000$

Beta book value $752,000$

Excess fair value over book value $ $308,000$

Assignments to adjust Beta$$s assets to fair value:

To buildings $(20-$year remaining life$)$ $ $122,000$

To equipment $(4-$year remaining life$)(34,000)$

To franchises $(10-$year remaining life$)43,000$

To trademarks $($indefinite life$)177,000308,000$

$0$

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$)$

$2022$ $ $97,500$ $ $32,500$

$2023131,25052,500$

During $2024,$ Acme acquired additional inventory from Beta at a price of $$290,000.$ 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 $$248,800,$ 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 $ $(978,630)$ $ $(787,980)$ $ $(324,500)$

Cost of goods sold $628,000336,000154,000$

Operating expenses $234,000278,50096,700$

Income of Beta Company $(129,850)00$

Income of Cade Company $(29,520)(29,520)0$

Net income $ $(276,000)$ $ $(203,000)$ $ $(73,800)$

Retained earnings, $1/1/24$ $ $(894,000)$ $ $(615,000)$ $ $(161,000)$

Net income $($above$)(276,000)(203,000)(73,800)$

Dividends declared $100,00096,00050,000$

Retained earnings, $12/31/24$ $ $(1,070,000)$ $ $(722,000)$ $ $(184,800)$

Cash and receivables $ $63,640$ $ $350,080$ $ $90,000$

Inventory $430,700337,000130,900$

Investment in Beta Company $915,74000$

Investment in Cade Company $133,920133,9200$

Buildings $474,000356,000148,000$

Equipment $349,000155,00088,300$

Land $231,000334,00025,600$

Total assets $ $2,598,000$ $ $1,666,000$ $ $482,800$

Liabilities $ $(708,000)$ $ $(634,000)$ $ $(148,000)$

Common stock $(820,000)(310,000)(150,000)$

Retained earnings, $12/31/24(1,070,000)(722,000)(184,800)$

Total liabilities and equities $ $(2,598,000)$ $ $(1,666,000)$ $ $(482,800)$

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.

Note: For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.

ACME CORPORATION AND CONSOLIDATED SUBSIDIARIES

Consolidation Worksheet

December $31,2024$

Accounts Acme Corporation Beta Company Cade Company Consolidation Entries Noncontrolling Interest Consolidated Balance

Debit Credit

Sales and other revenue $(978,630)(787,980)324,500$

Cost of goods sold $628,000336,000154,000$

Operating expenses $234,000278,50096,700$

Income of Beta Company $(129,850)$

Income of Cade Company $(29,520)(29,520)$

Net income $(276,000)(203,000)73,800$

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 $894,000$

Beta Company $615,000$

Cade Company $161,000$

Net income $276,000203,00073,800$

Dividends declared

Acme Corporation $100,000$

Beta Company $96,000$

Cade Company $50,000$

Retained earnings, $12/31/24(1,070,000)(722,000)184,8000$

Cash and receivables $63,640350,08090,000$

Inventory $430,700337,000130,900$

Investment in Beta Company $915,740$

Investment in Cade Company $133,920133,920$

Buildings $474,000356,000148,000$

Equipment $349,000155,00088,300$

Land $231,000334,00025,600$

Trademarks

Franchise contracts

Total assets $(2,598,000)(1,666,000)482,8000$

Liabilities $(708,000)(634,000)148,000$

Noncontrolling interest in Cade

Noncontrolling interest in Beta

Noncontrolling interest in subsidiary companies $0$

Common stock $(820,000)(310,000)150,000$

Retained earnings $(1,070,000)(722,000)184,800$

Total liabilities and equities $(2,598,000)(1,666,000)482,800000$