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: $ 801,500 343,500 $1,145,000 883,000 $ 262,000 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) $ 65,000 (26,200) 62,000 100,800 161,200 $ 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 $135,000 162,500 Remaining Intra-Entity Inventory- End of Year (at transfer price) $45,000 65,000 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 $292,000, 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 $241,000. Of this merchandise, 45 percent is still held at year-end. Following are the financial records for the three companies for 2021. $ $ $ Wilson Company (846,340) 373,000 311,500 0 (29,160) (191,000) (683,000) (191,000) 96,000 (778,000) 382,840 373,000 $ $ $ 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 $ (1,114,552) 620,000 317,000 (113,288) (29,160) $ (320,000) $ (833, 000) (320,000) 100,000 $ (1,053,000) $ 24, 602 408,650 924,588 155,160 397,000 398,000 270,000 $ 2,578,000 $ (705,000) (820,000) (1,053,000) $ (2,578,000) Cuddy Company ( 346,500) 176,000 97,600 0 0 (72,900) (215,000) (72,900) 50,000 (237,900) 85,250 213,950 0 0 148,000 92,200 18,500 557,900 (170,000) (150,000) (237,900) (557,900) $ 155,160 359,000 147,000 326,000 $ 1,743,000 $ (655,000) (310,000) (778,000) $ (1,743,000) $ $ Note: Parentheses indicate 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 1,114,552 846,340 346,500 Cost of goods sold 620,000 373,000 176,000 Operating expenses 317,000 311,500 97,600 Income of Wilson Company 113,288 Income of Cuddy Company 29,160 29,160 Net income 320,000 191,000 72,900 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 833,000 Wilson Company 683,000 Cuddy Company 215,000 Net income 320,000 191,000 72,900 Dividends declared House Corporation 100,000 Wilson Company 96,000 0 0 215,000 72,900 320,000 191,000 100,000 96,000 50,000 0 1,053,000 24,602 778,000 382,840 237,900 85,250 408,650 373,000 213,950 924,588 Cuddy Company Net income Dividends declared House Corporation Wilson Company Cuddy Company Retained earnings, 12/31/21 Cash and receivables Inventory Investment in Wilson Company Investment in Cuddy Company Buildings Equipment Land Goodwill Franchise contracts Total assets Liabilities Noncontrolling interest in Cuddy Noncontrolling interest in Wilson Noncontrolling interest in subsidiary companies Common stock Retained earnings Total liabilities and equities 155,160 397,000 398,000 155,160 359,000 147,000 326,000 148,000 92,200 18,500 270,000 2,578,000 1,743,000 557,900 705,000 655,000 170,000 310,000 820,000 1,053,000 2,578,000 778,000 1,743,000 150,000 237,900 557,900 0