Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1 2018, for $737.280 cash. At the acquisition date, Sierra's total fair value, including the noncontrolling interest, was assessed at $921600 although Sierra's book value was only $680,000. 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 remaini Copyright (20-year remaining life) Totes payable (due in 8 years Book Value $ 60,100 352.000 147.000 (151,000) Fair Value 5 228, 100 32.000 253,000 (133,400) 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 353.000 Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense tauity in income of slere 163.00) 479.000 13.300 2.se 3.150 notated earnings, 3/1/1 Dividends declared 11.00.500 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 (1,635,200) 795,000 358,000 5 Sierra (563,800) 479,000 13,300 7,350 8,150 $ $ Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra Net income Retained earnings, 1/1/18 Net income Dividends declared Retained earnings, 12/31/18 Current assets Investment in Sierra Land Buildings and equipment (net Copyright Total assets Accounts payable Notes payable Common stock Additional paid in capital Retained earnings (above) Total liabilities and equities 49.000 (122,880) (556,000) $ (1,392,500) (556, 000) 260,000 $ (1,688,500) $ 1,081,420 608,080 385.000 911.000 (156,000) (520,000) (156, 000) 65,30 (611,000 570,550 $ $ 60.109 338.700 $ 3,185,500 5 (227,000 (520,000) (380,000) (450,000) (1,688,500 303,185,500) $ 1,109,000 $ 157,000 151,000) (100.000) 60.000 (611,000) 3 (1,109,000) Alat 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.) Noncontrolling consolidated Accounts Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra Separate company net income Consolidated net income Ni to noncontrolling interest PADRE INC., AND SIERRA CORPORATION Consolidated Worksheet For Year Ending December 31, 2018 Consolidation Entries Padre Sierra Debit Credit $(1635 200) 5 (663 800) 795 000 479.000 358 000 13.300 0 7350 49.000 8.150 (122 800) $ 556 000) S (156 000) 23 Next >
