Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2018, for $778,400 cash. At the acquisition date, Sierra's total fair value, including the noncontrolling interest, was assessed at $973,000 although Sierra's book value was only $674,000. Also, several individual items on Sierra's financial records had fair values that differed from their book values as follows: 200 Land Buildings and equipment (10-year remaining life) Copyright (20-year remaining life) Notes payable (due in 8 years) Book Value $ 60,200 293,000 198,000 (204,000) Fair Value $ 310,200 242,000 282,000 (188,000) 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, 2018, for both companies. Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra Net income Retained earnings, 1/1/18 Net income Dividends declared Retained earnings, 12/31/18 Current assets Investment in Sierra Land Buildings and equipment (net) Copyright Total assets Accounts payable Padre $ (1,461,980) 739,000 345,000 0 49,500 (177,520) $ (506,000) $ (1,315, 000) (506,000) 260,000 $ (1,561,000) 885,080 903,920 322,000 975,000 0 $ 3,086,000 $ (260,000) Sierra $ (669,550) 420,000 10,500 9,900 6,150 0 $ (223,000) $ (514,000) (223,000) 65,000 $ (672,000) 695,200 0 60,200 282,500 188,100 $ 1,226,000 $ (190,000) 260,000 $ (1,561,000) $ 885,080 903,920 322,000 975,000 0 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 65,000 $ (672,000) $ 695,200 0 60,200 282,500 188,100 $ 1,226,000 $ (190,000) (204,000) (100,000) (60,000) (672,000) $ (1,226,000) $ 3,086,000 $ (260,000) (515,000) (300,000) (450,000) (1,561,000) $ (3,086,000) 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 minu % Answer is not complete. PADRE INC., AND SIERRA CORPORATION Consolidated Worksheet For Year Ending December 31, 2018 Consolidation Entries Padre Sierra Debit Credit Accounts Noncontrolling Interest $ (669,550) (1,461,980) 739,000 345,000 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 5,100 Consolidated Totals $ (2,131,530) 1,159,000 350,400 14,100 57,650 0 420,000 10,500 9,900 6,150 0 $ (223,000) 49,500 (177,520) $ (506,000) 4,200 2,000 177,520 $ (550,380) 514,000 Net income (above) Dividends declared (1,315,000) (506,000) 260,000 $ (514,000) (223,000) 65,000 $ (672,000) $ 695,200 52,000 13,000 $ (550,380) $ (1,315,000) (506,000) 260,000 $ (1,561,000) $ 1,580,280 0 Retained earnings 12/31 (1,561,000) Current assets $ 885,080 903,920 Investment in Sierra 52,000 955,920 Dividends declared 260,000 65,000 52,000 13,000 260,000 Retained earnings 12/31 $ (1,561,000) |(1,561,000) $ (672,000) Current assets $ 695,200 $ 1,580,280 $ 885,080 903,920 Investment in Sierra 955,920 Land 322,000 975,000 52,000 250,000 5,100 84,000 51,000 4,200 60,200 282,500 188,100 $ 1,226,000 $ (190,000) (204,000) Buildings and equipment (net) Copyright Total assets Accounts payable Notes payable NCI in Sierra 1/1 NCI in Sierra 12/31 632,200 1,211,600 267,900 3,691,980 (450,000) (705,000) $ $ 3,086,000 $ (260,000) (515,000) $ / 16,000 2,000 194,600 (194,600) (181,600) Common stock (300.000) (300,000) (450,000) (1,561,000) Additional paid-in capital Retained earnings 12/31 (above) (100,000) (60,000) (672,000) 100,000 60,000 (225,980) (300,000) (450,000) (1,561,000) $ (3,691,980) Total liabilities and stockholders' equity |(3,086,000) |(1,226,000) 1,264,820 1,264,820 Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2018, for $778,400 cash. At the acquisition date, Sierra's total fair value, including the noncontrolling interest, was assessed at $973,000 although Sierra's book value was only $674,000. Also, several individual items on Sierra's financial records had fair values that differed from their book values as follows: 200 Land Buildings and equipment (10-year remaining life) Copyright (20-year remaining life) Notes payable (due in 8 years) Book Value $ 60,200 293,000 198,000 (204,000) Fair Value $ 310,200 242,000 282,000 (188,000) 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, 2018, for both companies. Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra Net income Retained earnings, 1/1/18 Net income Dividends declared Retained earnings, 12/31/18 Current assets Investment in Sierra Land Buildings and equipment (net) Copyright Total assets Accounts payable Padre $ (1,461,980) 739,000 345,000 0 49,500 (177,520) $ (506,000) $ (1,315, 000) (506,000) 260,000 $ (1,561,000) 885,080 903,920 322,000 975,000 0 $ 3,086,000 $ (260,000) Sierra $ (669,550) 420,000 10,500 9,900 6,150 0 $ (223,000) $ (514,000) (223,000) 65,000 $ (672,000) 695,200 0 60,200 282,500 188,100 $ 1,226,000 $ (190,000) 260,000 $ (1,561,000) $ 885,080 903,920 322,000 975,000 0 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 65,000 $ (672,000) $ 695,200 0 60,200 282,500 188,100 $ 1,226,000 $ (190,000) (204,000) (100,000) (60,000) (672,000) $ (1,226,000) $ 3,086,000 $ (260,000) (515,000) (300,000) (450,000) (1,561,000) $ (3,086,000) 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 minu % Answer is not complete. PADRE INC., AND SIERRA CORPORATION Consolidated Worksheet For Year Ending December 31, 2018 Consolidation Entries Padre Sierra Debit Credit Accounts Noncontrolling Interest $ (669,550) (1,461,980) 739,000 345,000 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 5,100 Consolidated Totals $ (2,131,530) 1,159,000 350,400 14,100 57,650 0 420,000 10,500 9,900 6,150 0 $ (223,000) 49,500 (177,520) $ (506,000) 4,200 2,000 177,520 $ (550,380) 514,000 Net income (above) Dividends declared (1,315,000) (506,000) 260,000 $ (514,000) (223,000) 65,000 $ (672,000) $ 695,200 52,000 13,000 $ (550,380) $ (1,315,000) (506,000) 260,000 $ (1,561,000) $ 1,580,280 0 Retained earnings 12/31 (1,561,000) Current assets $ 885,080 903,920 Investment in Sierra 52,000 955,920 Dividends declared 260,000 65,000 52,000 13,000 260,000 Retained earnings 12/31 $ (1,561,000) |(1,561,000) $ (672,000) Current assets $ 695,200 $ 1,580,280 $ 885,080 903,920 Investment in Sierra 955,920 Land 322,000 975,000 52,000 250,000 5,100 84,000 51,000 4,200 60,200 282,500 188,100 $ 1,226,000 $ (190,000) (204,000) Buildings and equipment (net) Copyright Total assets Accounts payable Notes payable NCI in Sierra 1/1 NCI in Sierra 12/31 632,200 1,211,600 267,900 3,691,980 (450,000) (705,000) $ $ 3,086,000 $ (260,000) (515,000) $ / 16,000 2,000 194,600 (194,600) (181,600) Common stock (300.000) (300,000) (450,000) (1,561,000) Additional paid-in capital Retained earnings 12/31 (above) (100,000) (60,000) (672,000) 100,000 60,000 (225,980) (300,000) (450,000) (1,561,000) $ (3,691,980) Total liabilities and stockholders' equity |(3,086,000) |(1,226,000) 1,264,820 1,264,820