For internal reporting purposes, Liepewan Corporation now uses the initial value method to account for its investment in Mertenika in Year 5.    

Using the information on income and dividends in the table below complete the consolidated financial statements for Liepewan Corporation on the provided worksheet for the year ending 12/31/Year 5.   

Income, dividends, and retained earnings figures for Mertenika Corporation for the years 1 through 5 are shown below.  

Mertenika Dividends Increase in Ending

Year Net Income Paid Book Value Retained Earnings

   1 700,000 400,000 300,000 2,000,000

   2 750,000 400,000 350,000 2,350,000

   3 800,000 450,000 350,000 2,700,000

   4 775,000 475,000 300,000 3,000,000

   5 800,000 500,000 300,000 3,300,000

Totals- $3,825,000 2,225,000 1,600,000

Consolidation Worksheet 12/31/Year 5 Initial Value

Accounts	Liepewan	Mertenika	Debit	Credit	Noncontrol Int	Totals
Revenues	(6,000,000)	(3,200,000)
Expenses	4,000,000	2,000,000
Depreciatn & Amrtizatn Expnse	800,000	400,000
Investee Income	(300,000)	0
Net Income	(1,500,000)	(800,000)
Noncontrolling Int NI
Retained Earnings 1/1	(10,200,000)	(3,000,000)
Net Income	(1,500,000)	(800,000)
Dividends	900,000	500,000
Retained earnings 12/31	(10,800,000)	(3,300,000)
Balance Sheet
Current Assets	1,000,000	950,000
Investment in Mertenika	3,600,000	0
PPE (net)	7,400,000	4,000,000
Copyrights	0	0
Goodwill	0	0
Land	3,800,000	1,000,000
Total Assets	15,800,000	5,950,000
Accounts Payable	(150,000)	(230,000)
Notes Payable	(250,000)	(120,000)
Noncontrol Interest 1/1
Noncontrol Interest 12/31
Common Stock	(100,000)	(300,000)
Additional Paid-in capital	(4,500,000)	(2,000,000)
Retained earnings	(10,800,000)	(3,300,000)
Total liabilities and equity	(15,800,000)	(5,950,000)