Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2018, for $755,520 cash. At the acquisition date, Sierra's total fair value, including the noncontrolling interest, was assessed at $944,400 although Sierra's book value was only $673,000. Also, several individual items on Sierra's financial records had fair values that differed from their book values as follows: Book Value Fair Value $ 69,100 Land Buildings and equipment (10-year remaining life) Copyright (20-year remaining life) Notes payable (due in 8 years) $ 286,100 336,000 113,000 (162,000) 314,000 173,000 (145,600) For internal reporting purposes, Padre, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2018, for both companies Padre Sierra $ (1,504,480)$(636,750) Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra 757,000 328,000 447,000 11,900 5,650 7,200 0 44,200 129,720 Net income $ (505,000 $(165,000) Retained earnings, 1/1/18 Net income Dividends declared $ (1,470,000) (513,000) (165,000) (505, 000) 260,000 65,000 Retained earnings, 12/31/18 $ (1,715,000) (613,000) Dividends declared 65,000 $ (1,715,000) (613,000) $665,450 69,100 324,100 260,000 Retained earnings, 12/31/18 Current assets Investment in Sierra Land Buildings and equipment (net) Copyright $ 1,032,760 833,240 340,000 949,000 3,155,001950 $ (228,000) (231,000) (162,000) Total assets 1,166,000 Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings (above) (462,000) (300,000) (450,000) (1,715,000) $ (3,155,000) (100,000) (60,000) 613,000) Total liabilities and equities $ (1,166,000) At year-end, there were no intra-entity receivables or payables Using the acquisition method, prepare the worksheet to consolidate these two companies. (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. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign.) PADRE INC., AND SIERRA CORPORATION Consolidated Worksheet PADRE INC, AND SIERRA CORPORATIONN Consolidated Worksheet For Year Ending December 31, 2018 Consolidation Entries Accounts Padre Sierra Debit Credit Noncontrolling Consolidated Interest Totals Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra Separate company net income Consolidated net income $ (1,504,480)$ (636,750) 447,000 11,900 5,650 7,200 0 $ (505,000) (165,000) 757,000 328,000 44,200 (129,720) NI to noncontrolling interest NI to Padre Company Retained earnings 1/1 Net income (above) $ (1,470,000) (513,000) (505,000)(165,000) NI to Padre Company Retained earnings 1/1 Net income (above) Dividends declared $ (1,470,000) (513,000) (505,000(165,000) 65,000 $ (1,715,000)$ (613,000) $ 1,032,760$665,450 260,000 Retained earnings 12/31 Current assets Investment in Sierra Land Buildings and equipment (net) Copyright 833,240 340,000 949,000 0 69,100 324,100 107,350 $ 3,155,000$ 1,166,000 $ (228,000) (231,000) (462,000)(162,000) Total assets Accounts payable Notes payable NCI in Sierra 1/1 NCI in Sierra 12/31 Common stock Additional paid-in capital Retained earnings 12/31 (above) Total liabilities and stockholders' equity (300,000) 100 (450,000) (60,000) (1,715,000) (613,000) $ (3,155,000)$(1,166,000)