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 Slerra's financial records had fair values that differed from their book values as follows: Land Buildings and equipment (10-year remainint life) Copyright (20-year remaining life) Notes payable (due in 3 years) Book Value $ 68,900 305,000 160,000 (133,000) Fair Valve $ 235,900 260,000 310,000 (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. Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in Income of Sierra Net Income Retained earnings, 1/1/21 tiet income Dividends declared Retained earning, 12/31/21 Current assets Investment in Sierra Land Buildings and equipment (net) Copyright Total assets Accounts payable totes avable Padre Sierra $(1,505,720) $ (636,850) 734,000 4.36,000 331,000 15,200 0 3,000 $1,000 7,650 (131,280) e 5 (471,000) $ (169.000) $(1.30,000) $(468,000) (471,000) (169,000) 260.000 5(1.516,000) $(572.000 983, 720 5 578,300 315,250 355,000 68,90 391,000 2850 152,000 5 3,045,000 $ 1,038,000 5 (249,000) 5 (223,000) (530.000) (133.000) Nyt peyi Notes payable Common stock Additional paid in capital Retained earnings (above) Total liabilities and equities (530,000) (300,000) (450,000) (1,516,000 $(3,045,000) (133,600) (100,000) (60,000) (572.000) $(1,688,000) At year-end, there were no intra entity receivables or payables. Prepare a worksheet to consolidate the financial statements of 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 Input all amounts as positive values.) NoncontrollingConsolidated Interest Totalt 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, 2021 Consolidation Entries Padre Sierra Debit Credit $(1,505,720) S 1636 850) 784,000 436,000 331.000 18 200 0 8.000 51,000 7850 (131,280) $ (471,000) $ (169,000) O DE
