House Corporation has been operating profitably since its creation in 1960. At the beginning of 2016, House acquired a 70 percent ownership in Wilson Company. At the acquisition date, House prepared the following fair-value allocation schedule: $ 843,500 361,500 $ 1,205,000 821,000 $ 384,000 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) $ 156,000 (33,000) 49,000 172,000 212,000 $ House regularly buys inventory from Wilson at a markup of 25 percent more than cost. House's purchases during 2016 and 2017 and related ending inventory balances follow: Year 2016 2017 Intra-Entity Remaining Intra-Entity Inventory- Purchases End of Year (at transfer price) $90,000 $30,000 125,000 50.000 On January 1, 2018, 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 $256,800, indicating neither goodwill nor other specific fair-value allocations. Each company put up one-half of the consideration transferred. During 2018, House acquired additional inventory from Wilson at a price of $278,000. Of this merchandise, 45 percent is still held at year-end. $ Wilson Company (884,500) 384,000 298,500 $ Cuddy Company (363,400) 196,000 92,400 $ $ $ $ Sales and other revenues Cost of goods sold Operating expenses Income of Wilson Company Income of Cuddy Company Net income Retained earnings, 1/1/18 Net income (above) Dividends declared Retained earnings, 12/31/18 Cash and receivables Inventory Investment in Wilson Company Investment in Cuddy Company Buildings Equipment Land Total assets Liabilities Common stock Retained earnings, 12/31/18 Total liabilities and equities House Corporation $ (945, 600) 573,000 287,000 (141,400) (30,000) $ (257,000) $ (892,000) (257,000) 100,000 $(1,049,000) 23,000 425, 300 1,028,300 134,400 441,000 367,000 261,000 $ 2,680,000 $ (693,000) (820,000) (1,049, 000) $ (2,562,000) (30,000) (232,000) (669,000) (232,000) 96,000 (805,000) 352,600 398,000 (75,000) (171,000) (75,000) 60,000 (186,000) 68,250 85,950 $ $ $ 134,400 382,000 132,000 340,000 $ 1,739,000 $ (624,000) (310,000) (805,000) $(1,739,000) $ $ 171,000 89,300 23,500 438,000 (102,000) (150,000) (186, 000) (438,000) $ Note: Parentheses indicate a credit balance. Using the three companies' following financial records for 2018, prepare a consolidation worksheet. 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. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign.) Noncontrolling Consolidated Interest Balance HOUSE CORPORATION AND CONSOLIDATED SUBSIDIARIES Consolidation Worksheet December 31, 2018 Consolidation Entries Accounts House Wilson Cuddy Debit Credit Corporation CompanyCompany Sales and other revenue (945,600) (884,500) (363,400) Cost of goods sold 573,000 384,000 196,000 Operating expenses 287,000 298,500 92,400 Income of Wilson Company (141,400) Income of Cuddy Company (30,000) (30,000) Net income (257,000)| (232,000)| (75,000) 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, 1/1/18: House Corporation (892,000) Wilson Company (669,000) Cuddy Company (171,000) Net income (257,000) (232,000) (75,000) Dividends declared House Corporation 100,000 Wilson Company 96.000 Cuddy Company 60,000 Retained earnings, 12/31/18 (1,049,000) (805,000) (186,000) Cash and receivables 23,000 352,600 68,250 Inventory 425,300 398,000 85,950 Investment in Wilson Company 1,028,300 Investment in Cuddy Company 134,400 134,400 Buildings 441,000 382,000 171.000 Equipment 367,000 132,000 89,300 Land 261,000 340,000 23,500 Goodwill Franchise contracts Total assets 2,680,000 1,739,000 438,000 Liabilities (693,000) (624,000) (102,000) Noncontrolling interest in Cuddy Noncontrolling interest in Wilson Noncontrolling interest in subsidiary companies Common stock (820,000) (310,000) (150,000) Retained earnings (above) (1.049,000) (805,000) (186,000) Total liabilities and equities (2,562,000) (1,739,000) (438,000) 0 0 House Corporation has been operating profitably since its creation in 1960. At the beginning of 2016, House acquired a 70 percent ownership in Wilson Company. At the acquisition date, House prepared the following fair-value allocation schedule: $ 843,500 361,500 $ 1,205,000 821,000 $ 384,000 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) $ 156,000 (33,000) 49,000 172,000 212,000 $ House regularly buys inventory from Wilson at a markup of 25 percent more than cost. House's purchases during 2016 and 2017 and related ending inventory balances follow: Year 2016 2017 Intra-Entity Remaining Intra-Entity Inventory- Purchases End of Year (at transfer price) $90,000 $30,000 125,000 50.000 On January 1, 2018, 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 $256,800, indicating neither goodwill nor other specific fair-value allocations. Each company put up one-half of the consideration transferred. During 2018, House acquired additional inventory from Wilson at a price of $278,000. Of this merchandise, 45 percent is still held at year-end. $ Wilson Company (884,500) 384,000 298,500 $ Cuddy Company (363,400) 196,000 92,400 $ $ $ $ Sales and other revenues Cost of goods sold Operating expenses Income of Wilson Company Income of Cuddy Company Net income Retained earnings, 1/1/18 Net income (above) Dividends declared Retained earnings, 12/31/18 Cash and receivables Inventory Investment in Wilson Company Investment in Cuddy Company Buildings Equipment Land Total assets Liabilities Common stock Retained earnings, 12/31/18 Total liabilities and equities House Corporation $ (945, 600) 573,000 287,000 (141,400) (30,000) $ (257,000) $ (892,000) (257,000) 100,000 $(1,049,000) 23,000 425, 300 1,028,300 134,400 441,000 367,000 261,000 $ 2,680,000 $ (693,000) (820,000) (1,049, 000) $ (2,562,000) (30,000) (232,000) (669,000) (232,000) 96,000 (805,000) 352,600 398,000 (75,000) (171,000) (75,000) 60,000 (186,000) 68,250 85,950 $ $ $ 134,400 382,000 132,000 340,000 $ 1,739,000 $ (624,000) (310,000) (805,000) $(1,739,000) $ $ 171,000 89,300 23,500 438,000 (102,000) (150,000) (186, 000) (438,000) $ Note: Parentheses indicate a credit balance. Using the three companies' following financial records for 2018, prepare a consolidation worksheet. 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. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign.) Noncontrolling Consolidated Interest Balance HOUSE CORPORATION AND CONSOLIDATED SUBSIDIARIES Consolidation Worksheet December 31, 2018 Consolidation Entries Accounts House Wilson Cuddy Debit Credit Corporation CompanyCompany Sales and other revenue (945,600) (884,500) (363,400) Cost of goods sold 573,000 384,000 196,000 Operating expenses 287,000 298,500 92,400 Income of Wilson Company (141,400) Income of Cuddy Company (30,000) (30,000) Net income (257,000)| (232,000)| (75,000) 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, 1/1/18: House Corporation (892,000) Wilson Company (669,000) Cuddy Company (171,000) Net income (257,000) (232,000) (75,000) Dividends declared House Corporation 100,000 Wilson Company 96.000 Cuddy Company 60,000 Retained earnings, 12/31/18 (1,049,000) (805,000) (186,000) Cash and receivables 23,000 352,600 68,250 Inventory 425,300 398,000 85,950 Investment in Wilson Company 1,028,300 Investment in Cuddy Company 134,400 134,400 Buildings 441,000 382,000 171.000 Equipment 367,000 132,000 89,300 Land 261,000 340,000 23,500 Goodwill Franchise contracts Total assets 2,680,000 1,739,000 438,000 Liabilities (693,000) (624,000) (102,000) Noncontrolling interest in Cuddy Noncontrolling interest in Wilson Noncontrolling interest in subsidiary companies Common stock (820,000) (310,000) (150,000) Retained earnings (above) (1.049,000) (805,000) (186,000) Total liabilities and equities (2,562,000) (1,739,000) (438,000) 0 0