On January 1, 2020, Travers Company acquired 90 percent of Yarrow Company's outstanding stock for $738,000. The 10 percent noncontrolling interest had an assessed fair value of $82,000 on that date. Any acquisition-date excess fair value over book value was attributed to an unrecorded customer list developed by Yarrow with a remaining life of 15 years.

On the same date, Yarrow acquired an 80 percent interest in Stookey Company for $360,000. At the acquisition date, the 20 percent noncontrolling interest fair value was $90,000. Any excess fair value was attributed to a fully amortized copyright that had a remaining life of 10 years. Although both investments are accounted for using the initial value method, neither Yarrow nor Stookey has distributed dividends since the acquisition date. Travers has a policy to declare and pay cash dividends each year equal to 40 percent of its separate company operating earnings. Reported income totals for 2020 follow:

Travers Company	$	320,000
Yarrow Company		170,000
Stookey Company		128,000

The following are the 2021 financial statements for these three companies (credit balances indicated by parentheses). Stookey has transferred numerous amounts of inventory to Yarrow since the takeover amounting to $84,000 (2020) and $105,000 (2021). These transactions include the same markup applicable to Stookey's outside sales. In each year, Yarrow carried 20 percent of this inventory into the succeeding year before disposing of it. An effective tax rate of 21 percent is applicable to all companies. All dividend declarations are paid in the same period.

	Travers Company				Yarrow Company				Stookey Company
Sales	$	(920,000	)		$	(615,400	)		$	(504,000	)
Cost of goods sold		490,600				328,200				302,400
Operating expenses		102,200				82,000				100,800
Net income	$	(327,200	)		$	(205,200	)		$	(100,800	)
Retained earnings, 1/1/21	$	(720,000	)		$	(615,600	)		$	(318,000	)
Net income (above)		(327,200	)			(205,200	)			(100,800	)
Dividends declared		130,880				0				0
Retained earnings, 12/31/21	$	(916,320	)		$	(820,800	)		$	(418,800	)
Current assets	$	456,200			$	389,800			$	330,700
Investment in Yarrow Company		738,000				0				0
Investment in Stookey Company		0				360,000				0
Land, buildings, and equipment (net)		972,800				840,000				518,800
Total assets	$	2,167,000			$	1,589,800			$	849,500
Liabilities	$	(750,680	)		$	(466,600	)		$	(230,700	)
Common stock		(500,000	)			(302,400	)			(200,000	)
Retained earnings, 12/31/21		(916,320	)			(820,800	)			(418,800	)
Total liabilities and equities	$	(2,167,000	)		$	(1,589,800	)		$	(849,500	)

1. Prepare the business combination's 2021 consolidation worksheet; ignore income tax effects.

Sales Cost of goods sold Operating expenses Accounts Net income Consolidated net income Net income attributable to NCI (Yarrow) Net income attributable to NCI (Stookey) Net income attributable to Travers Company Retained earnings, 1/1/21: Travers Company Yarrow Company Stookey Company Net income Dividends declared Retained earnings, 12/31/21 Current assets Investment in Yarrow Company Investment in Stookey Company Land, buildings, & equipment (net) Copyright Customer list Total assets Liabilities Common stock Retained earnings, 12/31/21 (above) Noncontrolling interest in Stookey, 1/1/21 Noncontrolling interest in Yarrow, 1/1/21 Noncontrolling interests in subsidiaries Total liabilities and equities TRAVERS COMPANY AND CONSOLIDATED SUBSIDIARIES Consolidation Worksheet For Year Ending December 31, 2021 Travers Company 920,000 490,600 102,200 327,200 720,000 327,200 130,880 916,320 456,200 738,000 972,800 2,167,000 750,680 500,000 916,320 2,167,000 Yarrow Company 615,400 328,200 82,000 205,200 615,600 205,200 820,800 389,800 360,000 840,000 1,589,800 466,600 302,400 820,800 1,589,800 Stookey Company 504,000 302,400 100,800 100,800 318,000 100,800 418,800 330,700 518,800 849,500 230,700 200,000 418,800 849,500 Consolidation Entries Noncontrolling Consolidated Credit Interest Debit 0 0 0 Balance 0 0