Consolidation Worksheet with Subsidiary Preferred Stock Purple Company owns 90 percent of the common stock and 60 percent of the preferred stock of Sage Corporation, both acquired at underlying book value on January 1, 20X1. At that date, the fais value of the noncontrolling interest in Sage common stock was equal to 10 percent of the book value of its common stock. Trial balances for the companies on December 31, 20x6, are as follows: P9-22 Purple Company Sage Corporation Debit $100,000 120,000 Debit Credit Credit $58,000 80,000 Cash Accounts Receivable Dividends Receivable Inventory Buildings &Equipment (net) Investment in Sage Corporation: 9,000 100,000 360,000 200,000 270,000 Preferred Stock Common Stock 120,000 364,500 continued Chapter 9 Consolidation Ownership Issues 499 Cost of Goods Sold Depreciation & Amortization Other Expenses Dividends Declared 280,000 40,000 31,000 170,000 30,000 20,000 Preferred Stock 15,000 10,000 Common Stock Accounts Payable Bonds Payable Dividends Payable Preferred Stock Common Stock Retained Earnings Sales Dividend Income Income from Sage Corporation Total 60,000 $ 100,000 300,000 $70,000 200,000 435,000 500,000 9,000 58,500 15,000 200,000 100,000 250,000 300,000 $1,602,500 $1,602,500 $935,000 $935,000 Sage preferred shares pay a 7.5 percent annual dividend and are cumulative. Preferred dividends for 20X6 were declared on December 31, 20X6, and are to be paid January 1, 20X7. Required a. Prepare the consolidation entries needed to complete a worksheet for 20x6. b. Prepare a consolidation worksheet as of December 31, 20x6