Hi, need help with a homework problem!! Thanks!!

In January 1, 2019, Power Company acquired a 70% interest in Saw Company for a purchase price that was $500,000 over the book value of Saws Stockholders Equity on the acquisition date. Power uses the equity method to account for its investment in Saw. The parent assigned the acquisition-date AAP as follows

AAP items Initial Fair Value Useful life (years)

Patent 350,000 10

Goodwill 150,000 Indefinite

500,000

Saw sells inventory to Power (upstream) which includes that inventory in products that it (Power), ultimately, sells to customers outside of the controlled group. You have compiled the following data as of 2024 and 2025:

2024 2025

Transfer price for inventory sale $305,500 $500,000

Costs of Goods Sold -$259,675 -$440,000

Gross Profit $45,825 $60,000

% inventory remaining 50% 40%

Gross profit deferred $22,913 $24,000

EOY Receivable/Payable $42,000 $18,000

The inventory not remaining at the end of the year has been sold outside of the controlled group.

Power and Saw report the following financial statements at December 31, 2025

Income statement

Power Saw

Sales $4,500,000 $750,000

Costs of Goods Sold -3,825,000 -660,000

Gross Profit 675,000 90,000

Income (loss) from sub 13,939

Operating expenses -323,000 -34,000

Net income 365,939 56,000

Statement of Retained Earnings

BOY Retained Earnings $4,465,000 $440,000

Net income 365,939 56,000

Dividends -105,400 -10,000

EOY Retained Earnings 4,725,539 486,000

Balance Sheet
	Power	Saw
Assets:
Cash	$420,000	$425,000
Accounts receivable	304,000	545,000
Inventory	654,000	425,000
Equity Investment	782,600
PPE, net	6,723,539	420,000
	$8,884,139	$1,815,000
Liabilities and Stockholders Equity:
Current Liabilities	$340,000	$175,000
Long-term Liabilities	1,750,000	753,000
Common Stock	853,600	92,100
APIC	1,215,000	308,900
Retained Earnings	4,725,539	486,000
	$8,884,139	$1,815,000

QUESTIONS TO ANSWER!!!!!!!!!

1. Compute the EOY noncontrolling interest equity balance.

2. Prepare the consolidation entries

3. Prepare the consolidation spreadsheet as of December 31, 2025: