On January 1, 2021, Pikes Corporation loaned Venti Company $300,000 and agreed to guarantee all of Ventis long-term debt in exchange for (1) decision-making authority over all of Ventis activities and (2) an annual management fee of 25 percent of Ventis annual revenues. As a result of the agreement, Pikes becomes the primary beneficiary of Venti (now a variable interest entity). Pikes loan to Venti stipulated a 7 percent (market) rate of interest to be paid annually with principal due in 10 years.

On January 1, 2021, Pikes estimated that the fair value of Ventis equity shares equaled $75,000 while Ventis book value was $55,000. Any excess fair over book value at that date was attributed to Ventis trademark with an indefinite life. Because Pikes owns no equity in Venti, all of the acquisition-date excess fair over book value is allocated to the noncontrolling interest.

Venti paid Pikes 25 percent of its 2021 revenues at the end of the year and recorded the payment in other operating expenses. Venti also paid the interest to Pikes for the loan. On December 31, 2021, Pikes and Venti submitted the following statements for consolidation. (Parentheses indicate credit balances.)

	Pikes				Venti
Revenues	$	(792,000	)		$	(216,000	)
Management fee		(54,000	)			0
Cost of good sold		621,000				89,000
Other operating expenses		76,000				64,000
Interest income		(21,000	)			0
Interest expense		0				39,000
Net income		(170,000	)			(24,000	)
Retained earnings, 1/1		(1,380,000	)			(40,000	)
Net income		(170,000	)			(24,000	)
Dividends declared		75,000				0
Retained earnings, 12/31		(1,475,000	)			(64,000	)
Current assets		360,000				73,000
Loan receivable from Venti		300,000				0
Equipment (net)		895,000				527,000
Trademark		0				125,000
Total assets		1,555,000				725,000
Current liabilities		(30,000	)			(92,000	)
Loan payable to Pikes		0				(300,000	)
Other long-term debt		0				(254,000	)
Common stock		(50,000	)			(15,000	)
Retained earnings, 12/31		(1,475,000	)			(64,000	)
Total liabilities and equity	$	(1,555,000	)		$	(725,000	)

Prepare the December 31, 2021, consolidation worksheet for Pikes and its variable interest entity Venti.

Consolidated Pikes and Venti Companies Consolidation Worksheet Year Ended December 31, 2021 Consolidation Entries Pikes Venti Debit Credit 792,000 $ 216,000 54,000 0 621,000 89,000 NCI Balances $ Revenues Management fee Cost of good sold Other operating expenses Interest income 64,000 76,000 21,000 0 Interest expense 0 39,000 Net income $ 170,000 $ 24,000 $ 0 $ 0 $ $ 40,000 Consolidated net income to noncontrolling interest to Pikes Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 Current assets 24,000 1,380,000 170,000 75,000 1,475,000 0 $ $ 64,000 $ 0 $ 360,000 $ 73,000 Loan receivable from Venti 300,000 0 895,000 Equipment (net) Trademark 0 527,000 125,000 725,000 Total assets $ 1,555,000 $ $ 0 30,000 92,000 Current liabilities Loan payable to Pikes thor Inna tarm dant 0 300,000 251 nnn Pikes Venti Debit Credit NCI Balances Revenues $ $ 792,000 54,000 621,000 216,000 0 89,000 Management fee Cost of good sold Other operating expenses Interest income 76,000 64,000 21,000 0 Interest expense 0 39,000 24,000 Net income $ 170,000 $ $ 0 Consolidated net income to noncontrolling interest to Pikes $ 0 $ $ 40,000 Retained earnings, 1/1 Net income Dividends declared 1,380,000 170,000 24,000 75,000 0 $ 1,475,000 $ 64,000 $ 0 Retained earnings, 12/31 Current assets $ $ 73,000 360,000 300,000 895,000 Loan receivable from Venti Equipment (net) Trademark 0 527,000 125,000 725,000 Total assets $ 1,555,000 $ $ 0 Current liabilities 30,000 0 92,000 300,000 254,000 50,000 15,000 Loan payable to Pikes Other long-term debt Common stock Noncontrolling interest Retained earnings, 12/31 Total liabilities and equity 0 0 0 1,475,000 1,555,000 $ 64,000 725,000 $ 0 0 $ 0