On January 1, 2017 Winter Co. acquired 60% of the stock of Spring, Inc. for $1,560,000. On this date, the fair market value of the Spring shares not purchased by the parent was $1,040,000, and the balances of Springs stockholders equity accounts totaled $1,500,000

On January 1, 2017, Springs recorded book values were equal to fair values for all items except for: 1) a previously unrecorded patent that had a fair value of $450,000 and a 12-year remaining useful life and 2) a customer list that was undervalued by $600,000 and had a 10-year remaining useful life. The parent uses the full equity method to account for its investment in the Spring subsidiary.

On January 1, 2019, Spring acquired $100,000 (face value) of Winters 8% bonds on the open market. At this date, the related liability on Winters books was $106,930, reflecting a 6% effective yield. Spring paid $93,660 for these bonds based on an effective interest rate of 10%

On January 1, 2018, Winter Co. sold land with a book value of $75,000 to Spring for $110,000. Spring continues to hold this land.

Spring routinely sells merchandise to Winter, and all inventory carried over from one year is sold in the next year. During 2019, the intra-entity sales were $600,000 (cost to Spring was $450,000) with $150,000 of merchandise remaining in Winters inventory at year-end. In 2018, the intra-entity sales totaled $625,000 (cost to Spring was $500,000). At December 31, 2018 $200,000 of inventory remained in Winters inventory.

Use the provided pre-closing trial balances and additional information that follows and prepare a December 31, 2019 consolidation spreadsheet (on Excel), in good form. The worksheet should include balances for the controlling and non-controlling interests in consolidated net income and the owners equity attributable to non-controlling interests. A separate worksheet in the same workbook should include the consolidation

Winter Spring (1,600,000) Income Statement Sales Bond Interest Income Equity in Spring's Earnings Operating & Other Expenses Bond Interest Expense Depreciation & Amortization Expense Cost of goods sold Separate Company NI (2,100,000) (58,910) (18,000) 540,000 400,000 1,020,000 (216,910) 327,000 42,000 116,000 990,000 (125,000) Statement of Retained Earnings Retained Earnings, 1/1 | Net Income Dividends Paid Retained Earnings, 12/31 (9,186,402) (216,910) 454,400 (8,948,912) (1,500,000) (125,000) 20,000 (1,605,000) Balance Sheet Cash Accounts Receivable Inventories Property, Plant, & Equipment, net Land Customer List Patent Investment in Spring Investments in bonds Total Assets 1,800,026 2,226,200 2,080,000 6,096,000 500,000 685,000 1,134,200 1,690,000 982,180 17,193,606 800,000 960,000 1,247,498 1,648,000 242,000 200,000 5,097,498 (1,616,000) (1,743,894) Accounts Payable Other Current Liabilities Bond Payable, net Other Long-Term Liabilities Common Stock | Retained Earnings, 12/31 Total Liabilities and Equity (4,000,000) (884,800 (8,948,912) (17,193,606) (240,000) (934,690) (1,017,808) (800,000) (500,000) (1,605,000) (5,097,498) Winter Spring (1,600,000) Income Statement Sales Bond Interest Income Equity in Spring's Earnings Operating & Other Expenses Bond Interest Expense Depreciation & Amortization Expense Cost of goods sold Separate Company NI (2,100,000) (58,910) (18,000) 540,000 400,000 1,020,000 (216,910) 327,000 42,000 116,000 990,000 (125,000) Statement of Retained Earnings Retained Earnings, 1/1 | Net Income Dividends Paid Retained Earnings, 12/31 (9,186,402) (216,910) 454,400 (8,948,912) (1,500,000) (125,000) 20,000 (1,605,000) Balance Sheet Cash Accounts Receivable Inventories Property, Plant, & Equipment, net Land Customer List Patent Investment in Spring Investments in bonds Total Assets 1,800,026 2,226,200 2,080,000 6,096,000 500,000 685,000 1,134,200 1,690,000 982,180 17,193,606 800,000 960,000 1,247,498 1,648,000 242,000 200,000 5,097,498 (1,616,000) (1,743,894) Accounts Payable Other Current Liabilities Bond Payable, net Other Long-Term Liabilities Common Stock | Retained Earnings, 12/31 Total Liabilities and Equity (4,000,000) (884,800 (8,948,912) (17,193,606) (240,000) (934,690) (1,017,808) (800,000) (500,000) (1,605,000) (5,097,498)