Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2018, for $736,960 cash. At the acquisition date, Sierra's total fair value, including the noncontrolling interest, was assessed at $921,200 although Sierra's book value was only $634,000. Also, several individual items on Sierra's financial records had fair values that differed from their book values as follows: Book ValueFair Value Land Buildings and equipment (10-year remaining life) Copyright (20-year remaining life) Notes payable (due in 8 years) 301,000 177,000 (229,000) $ 60,800 237,800 268,000 305,000 (213,800) 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 Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra $(1,476,500) (660,900) 428,000 14,200 8,850 8,850 725,000 352,000 47,300 (156,800) Net income $(509,000) (201,000) Retained earnings, 1/1/18 Net income Dividends declared $ (1,465,000) (474,000) (201,000) 260,000 65,000 (509,000) $ (1,714,000) (610,000) $ 1,126,240 $730,250 Retained earnings, 12/31/18 Current assets Investment in Sierra Land Buildings and equipment (net) Copyright 841,760 346,000 890,000 60,800 286,800 168,150 $ 1,246,000 Total assets $ 3,204,000 Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings (above) $ (247,000) (247,000) (229,000) (100,000) (60,000) (610,000) $ (3,204,000) 1,246,000) (493,000) (300,000) (450,000) (1,714,000) Total liabilities and equities 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 For Year Ending December 31, 2018 Consolidation Entries Padre Noncontrolling Consolidated Sierra Debit Credit Interest Totals $(1,476,500) (660,900> 428,000 14,200 8,850 8,850 25,000 Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra Separate company net income Consolidated net income 352,000 7,300 (156,800) $(509,000)(201,000) NI to noncontrolling interest NI to Padre Company Retained earnings 1/1 Net income (above) Dividends declared (1,465,000)(474,000) 509,000) (201,000) 65,000 (1,714,000)(610,000) 1,126,240730,250 260,000 Retained earmings 12/31 Current assets Investment in Sierra 841,760 346,000 890,000 60,800 286,800 168,150 3,204,000 $1,246,000 (247,000)(247,000) 493,000 (229,000) Buildings and equipment (net) Accounts payable Notes paya ble NCI in Sierra 1/1 NCI in Sierra 12/31 Common stock Additional paid-in capital Retained e arnings 12/31 (above Total liabilities and stockholders equity 300,000)100,000) (60,000) (1,714,000) (610,000) (3,204,000) $1,246,000) (450,000)