At year-end, there were no intra-entity receivables or payables.

Using the acquisition method, prepare the worksheet to consolidate these two companies. (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. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign.)

Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2018, for $736,960 cash At the acquisition date, Sierra's total fair value, including the noncontrolling interest, was assessed at $921,200 although Sierra's book value was only $634,000. Also, several individual items on Sierra's financial records had fair values that differed from their book values as follows Book Value Fair Value $ 60,800 Land Buildings and equipment (10-year remaining life) Copyright (20-year remaining life) Notes payable (due in 8 years) $ 237,800 301,000 177,000 (229,000) 268,000 305,000 (213,800) For internal reporting purposes, Padre, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2018, for both companies Padre Sierra (1,476,500) (660,900) Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra 428,000 14,200 8,850 8,850 725,000 352,000 47,300 156,800 $ (509,000) (201,000) Net income Retained earnings, 1/1/18 Net income Dividends declared $ (1,465,000) (474,000) (201,000) (509,000) 260,000 65,000 $ (1,714,000) $ (610,000) Retained earnings, 12/31/18 Current assets Investment in Sierra Land Buildings and equipment (net) Copyright 1,126,240 730,25 841,760 346,000 890,000 60,800 286,800 168,150 1,246,000 Total assets $ 3,204,000 Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings (above) $ (247,000) (247,000) (229,000) (100,000) (60,000) 610,000) $ (3,204,000) $ (1,246,000) (493,000) (300,000) (450,000) (1,714,000) Total liabilities and equities