On January 1, 2012, Mona, Inc., acquired 80 percent of Lisa Companys common stock as well as 60 percent of its preferred shares. Mona paid $65,000 in cash for the preferred stock, with a call value of 110 percent of the $50 per share par value. The remaining 40 percent of the preferred shares traded at a $34,000 fair value. Mona paid $552,800 for the common stock. At the acquisition date, the noncontrolling interest in the common stock had a fair value of $138,200. The excess fair value over Lisas book value was attributed to franchise contracts of $40,000. This intangible asset is being amortized over a 40-year period. Lisa pays all preferred stock dividends (a total of $8,000 per year) on an annual basis. During 2012, Lisas book value increased by $50,000. On January 2, 2012, Mona acquired one-half of Lisas outstanding bonds payable to reduce the business combinations debt position. Lisas bonds had a face value of $100,000 and paid cash interest of 10 percent per year. These bonds had been issued to the public to yield 14 percent. Interest is paid each December 31. On January 2, 2012, these bonds had a total $88,350 book value. Mona paid $53,310, indicating an effective interest rate of 8 percent. On January 3, 2012, Mona sold Lisa fixed assets that had originally cost $100,000 but had accumulated depreciation of $60,000 when transferred. The transfer was made at a price of $120,000. These assets were estimated to have a remaining useful life of 10 years. The individual financial statements for these two companies for the year ending December 31, 2013, are as fos:

a. What consolidation worksheet adjustments would have been required as of January 1, 2012, to eliminate the subsidiarys common and preferred stocks?

b. What consolidation worksheet adjustments would have been required as of December 31, 2012, to account for Monas purchase of Lisas bonds?

c. What consolidation worksheet adjustments would have been required as of December 31, 2012, to account for the intra-entity sale of fixed assets?

d. Assume that consolidated financial statements are being prepared for the year ending December 31, 2013. Calculate the consolidated balance for each of the following accounts:

Franchises

Fixed Assets

Accumulated Depreciation

Expenses

Mona, Inc. isa Company $ (500,000) (200,000) 120,000 Sales and other revenues Expenses Dividend income-Lisa common stock Dividend income-Lisa preferred stock 220,000 (8,000) (4,800) Retained earnings, 1/1/13 Net income (above) Dividends paid-common stock Dividends paid-preferred stock $ (292,800) $ (80,000) $ (700,000) $(500,000) (80,000) 10,000 8,000 $ (900,000) (562,000) (292,800) 92,800 Retained earnings, 12/31/13 Mona, Inc. Lisa Company $ 130,419 $ 500,000 552,800 65,000 51,781 1,100,000 (300,000) Investment in Lisa-common stock Investment in Lisapreferred stook Investment in Lisa-bonds 800,000 (200,000) 1,600,000 1,100,000 $ (400,000) (144,580) (100,000) 6,580 (200,000) (100,000) (562,000) $(1,600,000 $(1,100,000) Accumulated depreciation Accounts payable Bonds payable Discount on bonds payable . . .. Common stock.. _ _ _ _ . . . _ _ _ _ . . . _ _ _ . . . . _ _ . . . (300,000) Retained earnings, 12/31/13 (900,000) Total liabilities and equities . . _ _ _ _ . . . _ _ _ . . . _ _