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Padre, Incorporated, buys 8 0 percent of the outstanding common stock of Sierra Corporation on January 1 , 2 0 2 4 , for $
Padre, Incorporated, buys percent of the outstanding common stock of Sierra Corporation on January for $ cash. At the acquisition date, Sierras total fair value, including the noncontrolling interest, was assessed at $ although Sierras book value was only $ Also, several individual items on Sierras financial records had fair values that differed from their book values as follows: Account Book Value Fair Value Land $ $ Buildings and equipment year remaining life Copyright year remaining life Notes payable due in years For internal reporting purposes, Padre, Incorporated, employs the equity method to account for this investment. The following account balances are for the year ending December for both companies. Account Padre Sierra Revenues $ $ Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra Net income $ $ Retained earnings, $ $ Net income Dividends declared Retained earnings, $ $ Current assets $ $ Investment in Sierra Land Buildings and equipment net Copyright Total assets $ $ Accounts payable $ $ Notes payable Common stock Additional paidin capital Retained earnings above Total liabilities and equities $ $ At yearend, there were no intraentity receivables or payables. Required: 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, Incorporated, buys percent of the outstanding common stock of Sierra Corporation on January for $ cash. At the acquisition date, Sierras total fair value, including the noncontrolling interest, was assessed at $ although Sierras book value was only $ Also, several individual items on Sierras financial records had fair values that differed from their book values as follows:
Account Book Value Fair Value
Land $ $
Buildings and equipment year remaining life
Copyright year remaining life
Notes payable due in years
For internal reporting purposes, Padre, Incorporated, employs the equity method to account for this investment. The following account balances are for the year ending December for both companies.
Account Padre Sierra
Revenues $ $
Cost of goods sold
Depreciation expense
Amortization expense
Interest expense
Equity in income of Sierra
Net income $ $
Retained earnings, $ $
Net income
Dividends declared
Retained earnings, $ $
Current assets $ $
Investment in Sierra
Land
Buildings and equipment net
Copyright
Total assets $ $
Accounts payable $ $
Notes payable
Common stock
Additional paidin capital
Retained earnings above
Total liabilities and equities $ $
At yearend, there were no intraentity receivables or payables.
Required:
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.
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