On January 1, 2018, Primair Corporation loaned Vista Company $372,000 and agreed to guarantee all of Vistas long-term debt in exchange for (1) decision-making authority over all of Vistas activities and (2) an annual cash payment of 25 percent of Vistas revenues. As a result of the agreement, Primair is the primary beneficiary of Vista (a variable interest entity). Primairs loan to Vista stipulated a 10 percent (market) rate of interest to be paid annually.

On January 1, 2018, Primair estimated that the fair value of Vistas equity shares equaled $100,000 while Vistas book value was $36,700. Any excess fair over book value at that date was attributed to Vistas trademark with an indefinite life.

Because Primair owns no equity in Vista, all of the acquisition-date excess fair over book value is allocated to the noncontrolling interest.

Vista paid Primair 25 percent of its 2018 revenues at the end of the year. On December 31, 2018, Primair and Vista submitted the following statements for consolidation. Parentheses indicate credit balances.

Revenues		(911,500	)			(234,700	)
Cost of good sold		664,200				93,600
Other operating expenses		84,300				31,100
Interest income		(37,200	)			0
Interest expense		0				37,200
Net income		(200,200	)			(72,800	)
Retained earnings, 1/1		(1,627,000	)			(21,700	)
Net income		(200,200	)			(72,800	)
Dividends declared		293,600				0
Retained earnings, 12/31		(1,533,600	)			(94,500	)
Current assets		478,500				54,100
Loan receivable from Vista		372,000
Equipment (net)		866,000				568,100
Trademark		0				48,600
Total assets		1,716,500				670,800
Current liabilities		(132,900	)			(19,500	)
Long-term debt		0				(169,800	)
Loan payable to Primair						(372,000	)
Common stock		(50,000	)			(15,000	)
Retained earnings, 12/31		(1,533,600	)			(94,500	)
Total liabilities and equity		(1,716,500	)			(670,800	)

PRIMAIR AND VISTA
Consolidation Worksheet
Year Ended December 31, 2018
			Consolidation Entries				Consolidated Balances
	Primair	Vista	Debit	Credit	NCI	Balances
Revenues	$(911,500)	$(234,700)
Cost of good sold	664,200	93,600
Other operating expenses	84,300	31,100
Interest income	(37,200)
Interest expense		37,200
Net Income	$(200,200)	$(72,800)
Consolidated net income
to noncontrolling interest
to Primair
Retained earnings, 1/1	$(1,627,000)	$(21,700)
Net income	(200,200)	(72,800)
Dividends declared	293,600	0
Retained earnings, 12/31	$(1,533,600)	$(94,500)
Current assets	$478,500	$54,100
Loan receivable from Vista	372,000
Equipment (net)	866,000	568,100
Trademark	0	48,600
Total assets	$1,716,500	$670,800
Current liabilities	(132,900)	(19,500)
Long-term debt		(169,800)
Loan payable to Primair		(372,000)
Common stock	(50,000)	(15,000)
Noncontrolling interest
Retained earnings, 12/31	(1,533,600)	(94,500)
Total liabilities and equity	$(1,716,500)	$(670,800)