Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2021, for $791,520 cash. At the acquisition date, Sierra's total fair value, including the noncontrolling interest, was assessed at $989,400 although Sierra's book value was only $638,000. 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 $ 65,200 295,000 104,000 (187,000) (172,600) Fair Value $ 307,200 276,000 218,000 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 Net income Dividends declared Retained earnings, 12/31/21 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) Padre $ (1,401,180) 770,000 Sierra $ (647,000) 426,000 264,000 0 50,700 (151,520) 15,500 5,200 5,300 0 $ (468,000) $ (195,000) $ (1,492,500) (468,000) 260,000 $ (478,000) (195,000) 65,000 $(1,700,500) $ (608,000) $ 998,460 $ 681,500 891,040 0 349,000 65,200 944,000 0 $ 3,182,500 $ (205,000) (527,000) (300,000) (450,000) (1,700,500) 279,500 98,800 $ 1,125,000 $ (170,000) (187,000) (100,000) (60,000) (608,000) Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings (above) Total liabilities and equities $ (205,000) $ (170,000) (527,000) (300,000) (450,000) (187,000) (100,000) (60,000) (608,000) (1,700,500) $(3,182,500) $ (1,125,000) 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.) 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 NI to Padre Company Retained earnings, 1/1/21 PADRE INC., AND SIERRA CORPORATION Consolidated Worksheet For Year Ending December 31, 2021 Padre Sierra $ (1,401,180) $ (647,000) Consolidation Entries Debit Credit Noncontrolling Interest 770,000 426,000 264,000 15,500 1,900 0 5,200 5,700 50,700 5,300 1,800 (151,520) 0 151,520 $ (468,000) $ (195,000) Consolidated Totals $ (2,048,180) 1,196,000 277,600 10,900 57,800 0 $ (1,492,500) $ (478,000) 478,000 $ (1,492,500) Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 Current assets Investment in Sierra Land Buildings and equipment (net) Copyright Total assets Accounts payable Notes payable NCI in Sierra 1/1 NCI in Sierra 12/31 Common stock $ (1,492,500) $ (478,000) (468,000) 260,000 478,000 (195,000) 65,000 52,000 13,000 $ (1,492,500) (468,000) 260,000 $ (1,700,500) $ (608,000) $ 998,460 $ 681,500 891,040 0 52,000 943,040 0 349,000 65,200 242,000 656,200 944,000 279,500 1,900 19,000 1,206,400 0 98,800 114,000 5,700 207,100 $ 3,182,500 $ 1,125,000 $ 3,749,660 $ (205,000) $ (170,000) $ (375,000) (527,000) (187,000) 14,400 1,800 (701,400) 197,880 (197,880) $ (210,880) (222,760) (300,000) (100,000) 100,000 Additional paid-in capital (450,000) (60,000) 60,000 Retained earnings (above) (1,700,500) (608,000) (300,000) (450,000) (1,700,500) Notes payable NCI in Sierra 1/1 NCI in Sierra 12/31 Common stock Additional paid-in capital Retained earnings (above) (300,000) (100,000) 100,000 (527,000) (187,000) 14,400 1,800 197,880 (701,400) (197,880) S (210,880) (222,760) (300,000) (450,000) (1,700,500) (60,000) 60,000 (450,000) (608,000) (1,700,500) Total liabilities and equities $ (3,182,500) $(1,125,000) $ 1,221,320 $1,221,320 $ (3,749,660)