On January 1, 2021, Pikes Corporation loaned Venti Company $301,000 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 9 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 $76,000 while Ventis book value was $56,000. 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	$	(793,000	)		$	(217,000	)
Management fee		(54,250	)
Cost of good sold		622,000				89,100
Other operating expenses		77,000				64,100
Interest income		(27,090	)			0
Interest expense		0				39,100
Net income		(175,340	)			(24,700	)
Retained earnings, 1/1		(1,380,200	)			(41,000	)
Net income		(175,340	)			(24,700	)
Dividends declared		75,200				0
Retained earnings, 12/31		(1,480,340	)			(65,700	)
Current assets		365,000				74,000
Loan receivable from Venti		301,000
Equipment (net)		896,000				528,000
Trademark		0				126,000
Total assets		1,562,000				728,000
Current liabilities		(31,660	)			(93,000	)
Loan payable to Pikes						(301,000	)
Other long-term debt		0				(253,300	)
Common stock		(50,000	)			(15,000	)
Retained earnings, 12/31		(1,480,340	)			(65,700	)
Total liabilities and equity	$	(1,562,000	)		$	(728,000	)

Prepare the December 31, 2021, consolidation worksheet for Pikes and its variable interest entity Venti. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.)

Pikes and Venti Companies Consolidation Worksheet Year Ended December 31, 2021 Consolidation Entries Pikes Venti Debit Credit 793,000 $ 217,000 54,250 0 622,000 89,100 77,000 64,100 Consolidated Balances NCI $ 27,090 0 0 39,100 24,700 $ 175,340 $ $ 0 $ 0 41,000 24,700 0 Revenues Management fee Cost of good sold Other operating expenses Interest income Interest expense Net income Consolidated net income to noncontrolling interest to Pikes Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 Current assets Loan receivable from Venti Equipment (net) Trademark Total assets Current liabilities Loan payable to Pikes Other long-term debt Common stock Noncontrolling interest Retained earnings, 12/31 Total liabilities and equity $ 0 $ 1,380,200 $ 175,340 75,200 $ 1,480,340 $ $ 365,000 $ 301,000 896,000 0 $ 1,562,000 $ 31,660 65,700 74,000 0 $ 0 528,000 126,000 728,000 93,000 301,000 253,300 15,000 0 0 0 50,000 0 0 1,480,340 1,562,000 $ 65,700 728,000 $ $ 0 0 0 Pikes and Venti Companies Consolidation Worksheet Year Ended December 31, 2021 Consolidation Entries Pikes Venti Debit Credit 793,000 $ 217,000 54,250 0 622,000 89,100 77,000 64,100 Consolidated Balances NCI $ 27,090 0 0 39,100 24,700 $ 175,340 $ $ 0 $ 0 41,000 24,700 0 Revenues Management fee Cost of good sold Other operating expenses Interest income Interest expense Net income Consolidated net income to noncontrolling interest to Pikes Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 Current assets Loan receivable from Venti Equipment (net) Trademark Total assets Current liabilities Loan payable to Pikes Other long-term debt Common stock Noncontrolling interest Retained earnings, 12/31 Total liabilities and equity $ 0 $ 1,380,200 $ 175,340 75,200 $ 1,480,340 $ $ 365,000 $ 301,000 896,000 0 $ 1,562,000 $ 31,660 65,700 74,000 0 $ 0 528,000 126,000 728,000 93,000 301,000 253,300 15,000 0 0 0 50,000 0 0 1,480,340 1,562,000 $ 65,700 728,000 $ $ 0 0 0