House Corporation has been operating profitably since its creation in 1960. At the beginning of 2012, House acquired a 70 percent ownership in Wilson Company. At the acquisition date, House prepared the following fair-value allocation schedule:

Consideration transferred for 70 percent interest in Wilson	$	707,000
Fair value of the 30% noncontrolling interest	303,000
Wilson business fair value	$	1,010,000
Wilson book value	790,000
Excess fair value over book value	$	220,000
Assignments to adjust Wilson?s assets to fair value:
To buildings (20-year life)	$	60,000
To equipment (4-year life)	(20,000	)
To franchises (10-year life)	40,000	80,000
To goodwill (indefinite life)	$	140,000

House regularly buys inventory from Wilson at a markup of 25 percent more than cost. House?s purchases during 2012 and 2013 and related ending inventory balances follow:

Year	Intra-Entity Purchases	Retained Intra-Entity Inventory?End of Year (at transfer price)
2012	$	120,000	$	40,000
2013	150,000	60,000

On January 1, 2014, House and Wilson acted together as co-acquirers of 80 percent of Cuddy Company?s outstanding common stock. The total price of these shares was $240,000, indicating neither goodwill nor other specific fair-value allocations. Each company put up one-half of the consideration transferred. During 2014, House acquired additional inventory from Wilson at a price of $200,000. Of this merchandise, 45 percent is still held at year-end.

Using the three companies' financial records for 2014 above, prepare a consolidation worksheet. The partial equity method based on separate operating incomes has been applied to each investment.

House Corporation	Wilson Company	Cuddy Company
Sales and other revenues	$	(900,000	)	$	(700,000	)	$	(300,000	)
Cost of goods sold	551,000	300,000	140,000
Operating expenses	219,000	270,000	90,000
Income of Wilson Company	(91,000	)	0	0
Income of Cuddy Company	(28,000	)	(28,000	)	0
Net income	$	(249,000	)	$	(158,000	)	$	(70,000	)
Retained earnings, 1/1/14	$	(820,000	)	$	(590,000	)	$	(150,000	)
Net income (above)	(249,000	)	(158,000	)	(70,000	)
Dividends paid	100,000	96,000	50,000
Retained earnings, 12/31/14	$	(969,000	)	$	(652,000	)	$	(170,000	)
Cash and receivables	$	220,000	$	334,000	$	79,000
Inventory	390,200	320,000	103,000
Investment in Wilson Company	807,800	0	0
Investment in Cuddy Company	128,000	128,000	0
Buildings	385,000	320,000	144,000
Equipment	310,000	130,000	88,000
Land	180,000	300,000	16,000
Total assets	$	2,421,000	$	1,532,000	$	418,000
Liabilities	$	(632,000	)	$	(570,000	)	$	(98,000	)
Common stock	(820,000	)	(310,000	)	(150,000	)
Retained earnings, 12/31/14	(969,000	)	(652,000	)	(170,700	)
Total liabilities and equities	$	(2,421,000	)	$	(1,532,000	)	$	(418,000	)

Note: Parentheses indicate a credit balance.

cquisition date, House prepared the following fair-value allocation schedule:

Consideration transferred for 70 percent interest in Wilson	$	707,000
Fair value of the 30% noncontrolling interest	303,000
Wilson business fair value	$	1,010,000
Wilson book value	790,000
Excess fair value over book value	$	220,000
Assignments to adjust Wilson?s assets to fair value:
To buildings (20-year life)	$	60,000
To equipment (4-year life)	(20,000	)
To franchises (10-year life)	40,000	80,000
To goodwill (indefinite life)	$	140,000

House regularly buys inventory from Wilson at a markup of 25 percent more than cost. House?s purchases during 2012 and 2013 and related ending inventory balances follow:

Year	Intra-Entity Purchases	Retained Intra-Entity Inventory?End of Year (at transfer price)
2012	$	120,000	$	40,000
2013	150,000	60,000

On January 1, 2014, House and Wilson acted together as co-acquirers of 80 percent of Cuddy Company?s outstanding common stock. The total price of these shares was $240,000, indicating neither goodwill nor other specific fair-value allocations. Each company put up one-half of the consideration transferred. During 2014, House acquired additional inventory from Wilson at a price of $200,000. Of this merchandise, 45 percent is still held at year-end.

Using the three companies' financial records for 2014 above, prepare a consolidation worksheet. The partial equity method based on separate operating incomes has been applied to each investment.

House Corporation	Wilson Company	Cuddy Company
Sales and other revenues	$	(900,000	)	$	(700,000	)	$	(300,000	)
Cost of goods sold	551,000	300,000	140,000
Operating expenses	219,000	270,000	90,000
Income of Wilson Company	(91,000	)	0	0
Income of Cuddy Company	(28,000	)	(28,000	)	0
Net income	$	(249,000	)	$	(158,000	)	$	(70,000	)
Retained earnings, 1/1/14	$	(820,000	)	$	(590,000	)	$	(150,000	)
Net income (above)	(249,000	)	(158,000	)	(70,000	)
Dividends paid	100,000	96,000	50,000
Retained earnings, 12/31/14	$	(969,000	)	$	(652,000	)	$	(170,000	)
Cash and receivables	$	220,000	$	334,000	$	79,000
Inventory	390,200	320,000	103,000
Investment in Wilson Company	807,800	0	0
Investment in Cuddy Company	128,000	128,000	0
Buildings	385,000	320,000	144,000
Equipment	310,000	130,000	88,000
Land	180,000	300,000	16,000
Total assets	$	2,421,000	$	1,532,000	$	418,000
Liabilities	$	(632,000	)	$	(570,000	)	$	(98,000	)
Common stock	(820,000	)	(310,000	)	(150,000	)
Retained earnings, 12/31/14	(969,000	)	(652,000	)	(170,700	)
Total liabilities and equities	$	(2,421,000	)	$	(1,532,000	)	$	(418,000	)

Note: Parentheses indicate a credit balance.

House Corporation has been operating profitably since its creation in 1960. At the beginning of 2012, House acquired a 70 percent ownership in Wilson Company. At the acquisition date, House prepared the following fairvalue allocation schedule: Consideration transferred for 70 percent interest in Wilson $ Fair value of the 30% noncontrolling interest 707,000 303,000 Wilson business fair value $ Wilson book value 1,010,00 0 790,000 Excess fair value over book value $ 220,000 Assignments to adjust Wilson's assets to fair value: To buildings (20-year life) $ 60,00 0 To equipment (4-year life) (20,00 0 To franchises (10-year life) 40,00 0 To goodwill (indefinite life) ) 80,000 $ 140,000 House regularly buys inventory from Wilson at a markup of 25 percent more than cost. House's purchases during 2012 and 2013 and related ending inventory balances follow: Year 201 2 201 3 Intra-Entity Purchases $ 120,000 150,000 Retained IntraEntity InventoryEnd of Year (at transfer price) $ 40,000 60,000 On January 1, 2014, House and Wilson acted together as coacquirers of 80 percent of Cuddy Company's outstanding common stock. The total price of these shares was $240,000, indicating neither goodwill nor other specific fairvalue allocations. Each company put up onehalf of the consideration transferred. During 2014, House acquired additional inventory from Wilson at a price of $200,000. Of this merchandise, 45 percent is still held at yearend. Using the three companies' financial records for 2014 above, prepare a consolidation worksheet. The partial equity method based on separate operating incomes has been applied to each investment. House Corporation Sales and other revenues $ (900,000 Wilson Company ) $ (700,000 Cuddy Company ) $ (300,00 0 ) Cost of goods sold 551,000 300,000 140,00 0 Operating expenses 219,000 270,000 90,000 Income of Wilson Company (91,000 ) 0 0 Income of Cuddy Company (28,000 ) (28,000 ) $ (249,000 ) $ (158,000 ) $ (70,000 ) $ (820,000 ) $ (590,000 ) $ (150,00 0 ) (249,000 ) (158,000 ) (70,000 ) Net income Retained earnings, 1/1/14 Net income (above) Dividends paid Retained earnings, 12/31/14 Cash and receivables 100,000 $ (969,000 $ 220,000 0 96,000 ) $ (652,000 $ 334,000 50,000 ) $ (170,00 0 $ 79,000 ) 390,200 320,000 103,00 0 Investment in Wilson Company 807,800 0 0 Investment in Cuddy Company 128,000 128,000 0 Buildings 385,000 320,000 144,00 0 Equipment 310,000 130,000 88,000 Land 180,000 300,000 16,000 Inventory $ 2,421,00 0 $ (632,000 ) Common stock (820,000 Retained earnings, 12/31/14 Total assets Liabilities Total liabilities and equities $ $ 1,532,00 0 $ (570,000 ) ) (310,000 (969,000 ) (2,421,0 00 ) $ Note: Parentheses indicate a credit balance. $ 418,00 0 $ (98,000 ) ) (150,00 0 ) (652,000 ) (170,70 0 ) (1,532,0 00 ) (418,00 0 ) $