Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2021, for $766,240 cash. At the acquisition date, Sierra's total fair value, including the noncontrolling interest, was assessed at $957,800 although Sierra's book value was only $650,000. Also, several individual items on Sierra's financial records had fair values that differed from their book values as follows: Book Value Land $ 63,900 Fair Value $ 254,900 Buildings and equipment (10-year remaining life) Copyright (20-year remaining life) Notes payable (due in 8 years) 356,000 181,000 (224,000) 326,000 317,000 (213,200) 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. Padre $(1,426,320) 702,000 329,000 0 48,400 (155,080) $ (502,000) Sierra $ (693,450) 461,000 19,000 9,050 5,400 0 $ (199,000) $(1,460,000) $ (490,000) (502,000) 260,000 $ (1,702,000) 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 Common stock Additional paid-in capital Retained earnings (above) Total liabilities and equities $ 1,062,680 869,320 347,000 Notes payable (199,000) $ 65,000 (624,000) $ 619,150 0 63,900 928,000 337,000 171,950 $ 3,207,000 $ 1,192,000 $ (251,000) $ (184,000) (504,000) (300,000) (450,000) (224,000) (100,000) (60,000) (624,000) (1,702,000) $(3,207,000) $ (1,192,000) 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.) ++ PADRE INC., AND SIERRA CORPORATION Consolidated Worksheet For Year Ending December 31, 2021 Consolidation Entries Credit Accounts Padre Sierra Debit $ (1,426,320) $ (693,450) 702,000 329,000 461,000 19,000 0 9,050 48,400 (155,080) 5,400 0 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 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 Additional paid-in capital Retained earnings (above) Total liabilities and equities $ (502,000) $ (199,000) $ (1,460,000) $ (490,000) (502,000) 260,000 (199,000) 65,000 $ (1,702,000) $ (624,000) $ 1,062,680 $ 619,150 869,320 347,000 928,000 0 0 63,900 337,000 171,950 $ 3,207,000 $1,192,000 $ (251,000) $ (184,000) (504,000) (224,000) (300,000) (100,000) (450,000) (1,702,000) (60,000) (624,000) $ (3,207,000) $(1,192,000) Noncontrolling Interest Consolidated Totals