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: Consideration transferred for 70% interest in Wilson $ Fair value of the 30% noncontrolling interest. Wilson business fair value $ 808,500 346,500 1,155,000 820,000 335,000 Wilson book value Excess fair value over book value $ Assignments to adjust Wilson's assets to fair value: To buildings (20-year remaining life) $ 63,000 To equipment (4-year remaining life) (22,800) To franchises (10-year remaining life) 78,000 118,200 To goodwill (indefinite life) $ 216,800 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: Intra-Entity Remaining Intra-Entity Inventory- Year Purchases End of Year (at transfer price) 2019 $127,500 $42,500 62,500 2020 156,250 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 $288,000, 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 $232,000. Of this merchandise, 45 percent is still held at year-end. Following are the financial records for the three companies for 2021. House Corporation (1,002,972) Wilson Company Cuddy Company Sales and other revenues $ $ (808,740) $ (361,000) Cost of goods sold 603,000 363,000 199,000 90,100 Operating expenses 220,000 312,500 Income of Wilson Company (93,268) 0 0 (28,760) Income of Cuddy Company (28,760) 0 Net Income $ (302,000) (162,000) $ (71,900) $ (210,000) Retained earings, 1/1/21 Net income (above) Dividends declared (877,000) (302,000) 100,000 (71,900) 50,000 Retained earnings, 12/31/21 (1,079,000) $ (231,900) (664,000) (162,000) 96,000 (730,000) 250,240 367,000 0 152,760 Cash and receivables $ 89,750 57,272 404,600 53,050 Inventory 942,368 0 Investment in Wilson Company Investment in Cuddy Company Buildings 152,760 0 434,000 389,000 243,000 Equipment 94,100 378,000 256,000 Land 144,000 395,000 18,000 Total assets $ 2,625,000 497,900 Liabilities $ $ 1,698,000 (658,000) (310,000) (730,000) Common stock (116,000) (150,000) (231,900) Retained earnings, 12/31/21 Total liabilities and equities $ $ (1,698,000) (497,900) $ $ $ $ $ $ $ (726,000) $ (820,000) (1,079,000) (2,625,000) $ $ $ 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.) HOUSE CORPORATION AND CONSOLIDATED SUBSIDIARIES Consolidation Worksheet December 31, 2021 Noncontrolling Consolidated Consolidation Entries Debit Credit Accounts Cuddy Company Wilson Company Interest Balance Sales and other revenue Cost of goods sold Operating expenses Income of Wilson Company Income of Cuddy Company Net income 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 Wilson Company Cuddy Company Net income Dividends declared House Corporation Wilson Company Cuddy Company Retained earings, 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 House. Corporation 1,002,972 603,000 220,000 93,268 28,760 302,000 877,000 302,000 100,000 1,079,000 57,272 404,600 942,368 152,760 434,000 378,000 256,000 2,625,000 726,000 820,000 1,079,000 2,625,000 808,740 363,000 312,500 28,760 162,000 664,000 162,000 96,000 730,000 250,240 367,000 152,760 389,000 144,000 395,000 1,698,000 658,000 310,000 730,000 1,698,000 361,000 199,000 90,100 71,900 210,000 71,900 50,000 231,900 89,750 53,050 243,000 94,100 18,000 497,900 116,000 150,000 231,900 497,900 0 0 0 0 0 0 0 0 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: Consideration transferred for 70% interest in Wilson $ Fair value of the 30% noncontrolling interest. Wilson business fair value $ 808,500 346,500 1,155,000 820,000 335,000 Wilson book value Excess fair value over book value $ Assignments to adjust Wilson's assets to fair value: To buildings (20-year remaining life) $ 63,000 To equipment (4-year remaining life) (22,800) To franchises (10-year remaining life) 78,000 118,200 To goodwill (indefinite life) $ 216,800 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: Intra-Entity Remaining Intra-Entity Inventory- Year Purchases End of Year (at transfer price) 2019 $127,500 $42,500 62,500 2020 156,250 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 $288,000, 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 $232,000. Of this merchandise, 45 percent is still held at year-end. Following are the financial records for the three companies for 2021. House Corporation (1,002,972) Wilson Company Cuddy Company Sales and other revenues $ $ (808,740) $ (361,000) Cost of goods sold 603,000 363,000 199,000 90,100 Operating expenses 220,000 312,500 Income of Wilson Company (93,268) 0 0 (28,760) Income of Cuddy Company (28,760) 0 Net Income $ (302,000) (162,000) $ (71,900) $ (210,000) Retained earings, 1/1/21 Net income (above) Dividends declared (877,000) (302,000) 100,000 (71,900) 50,000 Retained earnings, 12/31/21 (1,079,000) $ (231,900) (664,000) (162,000) 96,000 (730,000) 250,240 367,000 0 152,760 Cash and receivables $ 89,750 57,272 404,600 53,050 Inventory 942,368 0 Investment in Wilson Company Investment in Cuddy Company Buildings 152,760 0 434,000 389,000 243,000 Equipment 94,100 378,000 256,000 Land 144,000 395,000 18,000 Total assets $ 2,625,000 497,900 Liabilities $ $ 1,698,000 (658,000) (310,000) (730,000) Common stock (116,000) (150,000) (231,900) Retained earnings, 12/31/21 Total liabilities and equities $ $ (1,698,000) (497,900) $ $ $ $ $ $ $ (726,000) $ (820,000) (1,079,000) (2,625,000) $ $ $ 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.) HOUSE CORPORATION AND CONSOLIDATED SUBSIDIARIES Consolidation Worksheet December 31, 2021 Noncontrolling Consolidated Consolidation Entries Debit Credit Accounts Cuddy Company Wilson Company Interest Balance Sales and other revenue Cost of goods sold Operating expenses Income of Wilson Company Income of Cuddy Company Net income 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 Wilson Company Cuddy Company Net income Dividends declared House Corporation Wilson Company Cuddy Company Retained earings, 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 House. Corporation 1,002,972 603,000 220,000 93,268 28,760 302,000 877,000 302,000 100,000 1,079,000 57,272 404,600 942,368 152,760 434,000 378,000 256,000 2,625,000 726,000 820,000 1,079,000 2,625,000 808,740 363,000 312,500 28,760 162,000 664,000 162,000 96,000 730,000 250,240 367,000 152,760 389,000 144,000 395,000 1,698,000 658,000 310,000 730,000 1,698,000 361,000 199,000 90,100 71,900 210,000 71,900 50,000 231,900 89,750 53,050 243,000 94,100 18,000 497,900 116,000 150,000 231,900 497,900 0 0 0 0 0 0 0 0