On January 1, 2020, Peregrine Corporation acquired 100 percent of the voting stock of Sprano Corporation in exchange for $2,017,000 in cash and securities. Sprano continues its separate legal existence as a wholly owned subsidiary of Peregrine with independent accounting records. On the acquisition date, Sprano had the following balance sheet:

At the acquisition date, the carrying amounts of Sprano's assets and liabilities were generally equivalent to their fair values except for the following assets:

Peregrine applies the Equity method to maintain its investment account. Separate financial statements for each company for the year ended December 31, 2021 are presented in the first three columns of the consolidation worksheet provided. Parentheses indicate credit balances.

Complete the provided consolidation worksheet (in Excel) as of December 31, 2021 by:

• Preparing the consolidation entries. (Show the list of entries before posting to the worksheet.)
• Determining the consolidated totals

Accounts payable Long-term debt 57,000 993,000 Cash Accounts receivable Inventory Equipment (net) Trademarks 23,000 97,000 140,000 1,490,000 850,000 2,600,000 Common stock Retained earnings 800,000 750,000 2,600,000 $ $ Remaining Useful Life 8 years Asset Equipment Customer lists Trademarks Book Value Fair Value $ 1,490,000 $ 1,610,000 160,000 850,000 900,000 4 years indefinite Peregrine Sprano Sales Cost of goods sold Depreciation expense Amortization expense Equity earnings in Sprano Net income $ (4,200,000) $ (2,200,000) 2,300,000 1,550,000 493,000 272,000 105,000 (323,000) $ (1,625,000) $ (378,000) Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 $ (2,900,000) $ (900,000) (1,625,000) (378,000) 150,000 45,000 $ (4,375,000) $ (1,233,000) $ Cash Accounts receivable Inventory Investment in Sprano Equipment (net) Customer lists Trademarks Goodwill Total assets $ 430,000 690,000 890,000 2,390,000 6,000,000 115,000 2,500,000 185,000 $ 13,200,000 88,000 75,000 420,000 -0- 1,400,000 -0- 850,000 -0- 2,833,000 $ Accounts payable Long-term debt Common stock - Peregrine Common stock - Sprano Retained earnings 12/31 Total liabilities and equity $ (500,000) $ (75,000) (1,325,000) (725,000) (7,000,000) (800,000) (4,375,000) (1,233,000) $ (13,200,000) $ (2,833,000) 1 PEREGRINE COMPANY AND CONSOLIDATED SUBSIDIARY 2 Consolidation Worksheet 3 For Year Ending December 31, 2021 Label 4 5 Income Statement Peregrine Sprano Consolidation Entries Consolidated Totals 6 Dr. Cr. 7 Sales (4,200,000) (2.200,000) 8 Cost of goods sold 2,300,000 1,550,000 9 Depreciation expense 493,000 272,000 10 Amortization expense 105,000 -0- 11 Equity earings in Sprano (323,000) -0- 12 Net income (1.625,000) (378,000) 13 Statement of Retained Earnings 14 Retained eamings 1/1 (2.900,000) (900,000) 15 Net income (1,625,000) (378,000) 16 Dividends declared 150,000 45,000 17 Retained earnings 12/31 (4.375,000) (1.233,000). 18 Balance Sheet 19 Cash 430,000 88,000 20 Accounts receivable 690,000 75,000 21 Inventory 890,000 420,000 22 Investment in Sprano 2,390,000 -0- 23 24 25 Equipment (net) 6,000,000 1,400,000 26 Customer lists 115,000 -O- 27 Trademarks 2,500,000 850,000 28 Goodwill 185,000 -0- 29 Total assets 13,200,000 2,833,000 30 Accounts payable (500,000) (75,000) 31 Long-term debt (1,325,000) (725,000) 32 Common stock - Peregrine (7,000,000) 33 Common stock - Sprano (800,000) 34 Retained eamings 12/31 (4,375,000) (1.233,000) 35 Total liabilities and SE (13,200,000) (2.833,000) 36 37 38 Note: Use parentheses to indicate credit balances if a single column is used to show debit/credit balances