House Corporation has been operating profitably since its creation in 1960. At the beginning of 2019, House acquired a 70 percent ownership in Wilson Company. At the acquisition date, House prepared the following fair-value allocation schedule: $ 770,000 330,000 $ 1,100,000 751,000 $ 349,000 Consideration transferred for 70% interest in Wilson Fair value of the 30% noncontrolling interest Wilson business fair value Wilson book value Excess fair value over book value Assignments to adjust Wilson's assets to fair value: To buildings (20-year remaining life) To equipment (4-year remaining life) To franchises (10-year remaining life) To goodwill (indefinite life) $ 86,000 (31, 200) 55,500 110,300 238,700 $ House regularly buys inventory from Wilson at a markup of 25 percent more than cost. House's purchases during 2019 and 2020 and related ending inventory balances follow: Year 2019 2020 Intra-Entity Purchases $131,250 159,375 Remaining Intra-Entity Inventory- End of Year (at transfer price) $43,750 63,750 On January 1, 2021, 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 $260,800, indicating neither goodwill nor other specific fair-value allocations. Each company put up one-half of the consideration transferred. During 2021, House acquired additional inventory from Wilson at a price of $233,000. Of this merchandise, 45 percent is still held at year-end. Following are the financial records for the three companies for 2021. $ $ Cuddy Company (401,700) 228,000 99,600 a $ Wilson Company (859,860) 370,000 294,500 0 (29,640) (225,000) (628,000) (225,000) 96,000 (757,000) 264,960 338,000 $ $ $ Sales and other revenues Cost of goods sold Operating expenses Income of Wilson Company Income of Cuddy Company Net income Retained earnings, 1/1/21 Net income (above) Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in Wilson Company Investment in Cuddy Company Buildings Equipment Land Total assets Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and equities $ House Corporation $ (976,608) 597,000 221,000 (136,752) (29,640) $ (325,000) $ (884,000) (325,000) 100,000 $ (1,109,000) $ 79,458 405,050 970,452 140,040 453,000 326,000 256,000 $ 2,630,000 $ (701,000) (820,000) (1,109,000) $ (2,630,000) (74,100) (176,000) (74,100) 50,000 (200, 100) 82,250 78,350 $ $ $ 140, 040 389,000 204,000 351,000 $ 1,687,000 $ (620,000) (310,000) (757,000) $ (1,687,000) $ 0 221,000 90,200 18,300 490, 100 (140,000) (150,000) (200, 100) (490, 100) $ $ Note: Parentheses indicate a credit balance. Prepare a consolidation worksheet for 2021. The partial equity method based on separate company incomes has been applied to each investment. (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. Input all amounts as positive values.) Noncontrolling Consolidated Interest Balance HOUSE CORPORATION AND CONSOLIDATED SUBSIDIARIES Consolidation Worksheet December 31, 2021 Consolidation Entries House Wilson Cuddy Accounts Debit Credit Corporation Company Company Sales and other revenue 976,608 859,860 401,700 Cost of goods sold 597,000 370,000 228,000 Operating expenses 221,000 294,500 99,600 Income of Wilson Company 136,752 Income of Cuddy Company 29,640 29,640 Net income 325,000 225,000 74,100 Consolidated net income Net income attributable to noncontrolling interest (Wilson) Net income attributable to noncontrolling interest (Cuddy) Net income attributable to House Corporation Retained earnings, 1/1/21: House Corporation 884,000 Wilson Company 628,000 Cuddy Company 176,000 Net income 325,000 225,000 74,100 0 0 Dividends declared 100,000 96,000 0 House Corporation Wilson Company Cuddy Company Retained earnings, 12/31/21 Cash and receivables Inventory Investment in Wilson Company Investment in Cuddy Company 1,109,000 79,458 405,050 970,452 140,040 757,000 264,960 338,000 50,000 200,100 82,250 78,350 140,040 Buildings Equipment Land 453,000 326,000 256,000 389,000 204,000 351,000 221,000 90,200 18,300 Goodwill Franchise contracts Total assets 2,630,000 1,687,000 490, 100 0 701,000 620,000 140,000 Liabilities Noncontrolling interest in Cuddy Noncontrolling interest in Wilson Noncontrolling interest in subsidiary companies Common stock Retained earnings Total liabilities and equities 0 820,000 1,109,000 2,630,000 310,000 757,000 1,687,000 150,000 200,100 490,100 0 0 0