Padre, Inc, buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2021, for $736,000 cash. At the acquisition date, Sierra's total fair value, including the noncontrolling interest was assessed at $920,000 although Sierra's book value was only $628.000. Also, several individual items on Sierra's financial records had fair values that differed from their book values as follows: Land Buildings and equipment (10-year remaining life) Copyright (20-year remaining life) Notes payable (due in 8 years) Book Value $ 68,900 305,000 160,000 (133,000) Fair Value $ 235,9ee 260,00 318,000 (121,000) 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, 2021, for both companies Sierra 5 (636,858) 436,000 16,200 8,000 7,650 Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in Income of Sierra Net income Retained earnings, 1/1/21 Net Income Dividends declared Retained earnings, 12/31/21 Current assets Investment in Sierra Land Bulldings and equipment (net) Copyright Total assets Accounts payable Notes payable Coron stock Additional pali in capital Hetaloed earnings (above) Total liabilities and equites Padre $(1,505,720) 784.00 331,000 e 51,800 (131,280) 5 (471,00) 5(1,385,880) (471,000) 260.00 $(1.516,000) $ 983,720 815,280 355,000 891,800 5 (267.000) S (460,000) (169,900) 65.000 $(572,000) $ 578.30 $ 3,645,000 5 (249.000) (530.000 (0) (450,000 16.000 $(2,045, eee) 63.900 288.900 152.000 $1,688,000 5223,000) (133,300 (100,000 (60.000) (522.000 $(1,080,000 A year end, there were no intro-entity receivables or payables, Prepare a worksheet to consolidate the financial statements of these two companies (Por 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 mounts as positive values.) Shera Nontoning Cord Inces Toto AND SERRA CORPORATION oddam Works Hoe Year End 1,021 Canton Padre DU ord 5(1,505,720) $ (636.850) 284,000 436.000 331,000 16,200 g 8.000 51 000 7650 (131,280) 0 5. (471,000) $ (169.000) AS cours Reveren Cost of goods sold Depreciation expense Amortization pense Interest expense Eguy in incomo of Sion Separate company not income Consolidated net income Ni to necontrolling interest Ni to Padre Company Retained vattings, 1/1/21 Net Income Dividends dedared Retained earnings, 12/31/21 Curront assets Investment in Slomra Land Buildings and equipment (net) Copyright Total assets Accounts payable Notes payable NC in Sierra 1 NC in Siora 12/31 Commons Additional pudin.capital Reinodete slabovo) Tollbillies and cuties $(1.305,000) $ (468,000) (471000) (169.000 260 000 65,000 50.516 000) $ (572000) $ 963,7205 578,300 815,250 0 355 000 68,900 891000 288,800 9 152,000 5 3045.000 5 1,088,000 $ 249,000) 51223,000) 1530,000) (133.000 (300.000) (100,000) (450,000) 160.000) 1516,000) (572.000) $13.0450001361,085.000)
