Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2018, for $680,000 cash. At the acquisition date, Sierras total fair value, including the noncontrolling interest, was assessed at $850,000 although Sierras book value was only $600,000. Also, several individual items on Sierras financial records had fair values that differed from their book values as follows:

	Book Value				Fair Value
Land	$	60,000			$	225,000
Buildings and equipment (10-year remaining life)		275,000				250,000
Copyright (20-year remaining life)		100,000				200,000
Notes payable (due in 8 years)		(130,000	)			(120,000	)

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.

	Padre				Sierra
Revenues	$	(1,360,000	)		$	(540,000	)
Cost of goods sold		700,000				385,000
Depreciation expense		260,000				10,000
Amortization expense		0				5,000
Interest expense		44,000				5,000
Equity in income of Sierra		(105,000	)			0
Net income	$	(461,000	)		$	(135,000	)
Retained earnings, 1/1/18	$	(1,265,000	)		$	(440,000	)
Net income		(461,000	)			(135,000	)
Dividends declared		260,000				65,000
Retained earnings, 12/31/18	$	(1,466,000	)		$	(510,000	)
Current assets	$	965,000			$	528,000
Investment in Sierra		733,000				0
Land		292,000				60,000
Buildings and equipment (net)		877,000				265,000
Copyright		0				95,000
Total assets	$	2,867,000			$	948,000
Accounts payable	$	(191,000	)		$	(148,000	)
Notes payable		(460,000	)			(130,000	)
Common stock		(300,000	)			(100,000	)
Additional paid-in capital		(450,000	)			(60,000	)
Retained earnings (above)		(1,466,000	)			(510,000	)
Total liabilities and equities	$	(2,867,000	)		$	(948,000	)

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 minus sign.)

PADRE INC., AND SIERRA CORPORATION
Consolidated Worksheet
For Year Ending December 31, 2018
			Consolidation Entries
Accounts	Padre	Sierra	Debit	Credit	Noncontrolling Interest	Consolidated Totals
Revenues	$(1,360,000)	$(540,000)
Cost of goods sold	700,000	385,000
Depreciation expense	260,000	10,000
Amortization expense	0	5,000
Interest expense	44,000	5,000
Equity in income of Sierra	(105,000)	0
Separate company net income	$(461,000)	$(135,000)
Consolidated net income
NI to noncontrolling interest
NI to Padre Company
Retained earnings 1/1	$(1,265,000)	$(440,000)
Net income (above)	(461,000)	(135,000)
Dividends declared	260,000	65,000
Retained earnings 12/31	$(1,466,000)	$(510,000)
Current assets	$965,000	$528,000
Investment in Sierra	733,000
Land	292,000	60,000
Buildings and equipment (net)	877,000	265,000
Copyright	0	95,000
Total assets	$2,867,000	$948,000
Accounts payable	$(191,000)	$(148,000)
Notes payable	(460,000)	(130,000)
NCI in Sierra 1/1
NCI in Sierra 12/31
Common stock	(300,000)	(100,000)
Additional paid-in capital	(450,000)	(60,000)
Retained earnings 12/31 (above)	(1,466,000)	(510,000)
Total liabilities and stockholders' equity	$(2,867,000)	$(948,000)