Hi,

Could you help me to prepare a consolidation statement?

Please show me all calculations. ie) 30,000+ 20,000 = 10,000

On January 1, 2014, Pinnacle Corporation exchanged $3,608,000 cash for 100 percent of the outstanding voting stock of Strata Corporation. On the acquisition date, Strata had the following balance sheet: Cash Account s payable Long308,000 term debt Commo 434,000 n stock Retaine 2,000,000 d earnings $ 159,000 Accounts receivable Inventory Buildings (net) Licensing agreement s $ 376,000 2,760,000 1,500,000 1,465,000 3,200,000 $ 6,101,000 $ 6,101,000 Pinnacle prepared the following fair-value allocation: Fair value of Strata (consideratio n transferred) Carrying amount acquired Excess fair value to buildings (undervalued) to licensing agreements (overvalued) to goodwill (indefinite life) $ 3,608,000 2,965,000 $ $ 643,000 266,000 (97,000) 169,000 $ 474,000 At the acquisition date, Strata's buildings had a 10-year remaining life and its licensing agreements were due to expire in 5 years. At December 31, 2015, Strata's accounts payable included an $85,200 current liability owed to Pinnacle. Strata Corporation continues its separate legal existence as a wholly owned subsidiary of Pinnacle with independent accounting records. Pinnacle employs the initial value method in its internal accounting for its investment in Strata. The separate financial statements for the two companies for the year ending December 31, 2015, follow. Credit balances are indicated by parentheses. Sales Pinnacle (7,617,00 $ ) 0 Strata (3,189,00 $ ) 0 4,725,000 1,770,000 347,000 215,000 680,000 368,000 Cost of goods sold Interest expense Deprec iation expense Amorti zation expense Dividen d income Net income Retain ed earnings 1/1/15 Net income Dividen ds paid Retai ned Earning s 12/31/15 Cash Accoun ts receivab le Invento 640,000 (55,000) $ (1,920,00 ) 0 $ (196,000) $ (5,390,00 ) 0 $ $ (1,791,20 ) 0 (1,920,00 ) 0 (196,000) 400,000 55,000 (6,910,00 ) 0 $ (1,932,20 ) 0 $ 414,500 $ 517,700 1,665,000 235,000 1,335,000 1,630,000 ry Invest ment in Strata Buildin gs (net) Licensi ng agreem ents Goodw ill Total assets Accoun ts payable Longterm debt Comm on stock Retain ed earnings 12/31/15 Total Liabilitie s and OE 3,608,000 5,715,000 2,217,000 1,920,000 592,500 13,330,00 0 $ 6,519,700 $ (360,000) $ (807,500) (3,060,00 ) 0 (2,280,00 ) 0 (3,000,00 ) 0 (1,500,00 ) 0 (6,910,00 ) 0 (1,932,20 ) 0 $ $ (13,330,0 ) 00 $ (6,519,70 ) 0 a. Prepare a worksheet to consolidate the financial information for 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.) b. Compute the following amounts that would appear on Pinnacle's 2015 separate (nonconsolidated) financial records if Pinnacle's investment accounting was based on the equity method