Pavin acquires all of Stabler's outstanding shares on January 1, 2015, for $670,000 in cash. Of this amount, $51,000 was attributed to equipment with a 10-year remaining life and $61,000 was assigned to trademarks expensed over a 20-year period. Pavin applies the partial equity method so that income is accrued each period based solely on the earnings reported by the subsidiary. On January 1, 2018. Pavin reports $510,000 in bonds outstanding with a carrying amount of $473,600. Stabler purchases half of these bonds on the open market for $245,900. During 2018, Pavin begins to sell merchandise to Stabler. During that year, inventory costing $123,000 was transferred at a price of $164,000. All but $31.000 (at sales price) of these goods were resold to outside parties by year-end. Stabler still owes $54,000 for inventory shipped from Pavin during December. The following financial figures are for the two companies for the year ending December 31, 2018. Dividends were both declared and paid during the current year. Pavin Stabler Revenues $ (803,000) $ (547,000) Cost of goods sold 476,000 261,000 Expenses 146,000 179,500 Interest expense-bonds 57,000 0 Interest income bond inventment (24,650) Loss on extinguishment of bonds 0 Equity in Stabler's income (131, 150) Net income (255, 150) $ (131, 150) Retained earnings, 1/1/18 (366,000) $ (403,000) Net income (255, 150 ) (131, 150) Dividends paid 176,000 98,000 Retained earnings, 12/31/18 (445,150) $ (436,150) Cash and receivables 238,000 56,000 Inventory 196,000 100,000 Investment in Stabler 699, 150 0 Investment in Pavin bonds 249,750 Land, buildings, and equipment (net) 266,000 562,000 Trademarks 0 Total assets $ 1,399,150 $ 975,750 Accounts payable (125,000) $ (277,600) Bonds payable (510,000) (121,000) Discount on bonds 21,000 Common stock (330,000) (141,000) Retained earnings (above) (445, 150) (436,150) Total liabilities and stockholders' equity $(1,309, 150) $ (975,750) 0 0 0 $ $ $ $ $ 0 0 $ 0 Note: Credits are indicated by parentheses. Prepare a worksheet to produce consolidated balances. (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 Consolidated Totals column should be entered with a minus sign.) Accounts Revenues Cost of goods sold Expenses Interest expense-bonds Interest income-bond investment Loss on extinguishment of bonds Equity in income of Stabler Net Income Retained earnings, 1/1/18 Retained earnings, 1/1/18 Net income Dividends paid Retained earnings, 12/31/18 Cash and receivables Inventory Investment in Stabler Investment in Pavin Land, buildings, and equipment (net) Trademarks Total assets Accounts payable Bonds payable Discount on bonds Common stock Retained earnings Total liabilities and stockholders' equity PAVIN AND STABLER Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Consolidated Pavin Stabler Debit Credit Totals $ (803,000) $ (547,000) $ 164,000 476,000 261,000 7.750 164,000 146,000 179,500 8,150 57,000 0 28,500 0 (24,650) 24,650 0 0 9,100 (131,150) 0 131,150 $ (256,150) $ (131, 150) $ 0 (366,000) 24,450 (403,000) 403,000 (256,150) (131,150) 0 176,000 98,000 98,000 $ (445,150) $ (436,150) $ 0 $ 238,000 $ 56,000 54,000 196,000 108,000 7.750 689,150 0 98,000 ? 0 249,750 249.750 266,000 562,000 ? 0 0 ? ? $ 1,389,150 $ 975,750 $ 0 (125,000) (277.600) 2 (510,000) (121,000) 21,000 0 10,500 (330,000) (141,000) 141,000 (445,150) (436,150) $ (1.389,150) $ (975,750) $ 1,071,250 $ 612,500 $ 0 Pavin acquires all of Stabler's outstanding shares on January 1, 2015, for $670,000 in cash. Of this amount, $51,000 was attributed to equipment with a 10-year remaining life and $61,000 was assigned to trademarks expensed over a 20-year period. Pavin applies the partial equity method so that income is accrued each period based solely on the earnings reported by the subsidiary. On January 1, 2018. Pavin reports $510,000 in bonds outstanding with a carrying amount of $473,600. Stabler purchases half of these bonds on the open market for $245,900. During 2018, Pavin begins to sell merchandise to Stabler. During that year, inventory costing $123,000 was transferred at a price of $164,000. All but $31.000 (at sales price) of these goods were resold to outside parties by year-end. Stabler still owes $54,000 for inventory shipped from Pavin during December. The following financial figures are for the two companies for the year ending December 31, 2018. Dividends were both declared and paid during the current year. Pavin Stabler Revenues $ (803,000) $ (547,000) Cost of goods sold 476,000 261,000 Expenses 146,000 179,500 Interest expense-bonds 57,000 0 Interest income bond inventment (24,650) Loss on extinguishment of bonds 0 Equity in Stabler's income (131, 150) Net income (255, 150) $ (131, 150) Retained earnings, 1/1/18 (366,000) $ (403,000) Net income (255, 150 ) (131, 150) Dividends paid 176,000 98,000 Retained earnings, 12/31/18 (445,150) $ (436,150) Cash and receivables 238,000 56,000 Inventory 196,000 100,000 Investment in Stabler 699, 150 0 Investment in Pavin bonds 249,750 Land, buildings, and equipment (net) 266,000 562,000 Trademarks 0 Total assets $ 1,399,150 $ 975,750 Accounts payable (125,000) $ (277,600) Bonds payable (510,000) (121,000) Discount on bonds 21,000 Common stock (330,000) (141,000) Retained earnings (above) (445, 150) (436,150) Total liabilities and stockholders' equity $(1,309, 150) $ (975,750) 0 0 0 $ $ $ $ $ 0 0 $ 0 Note: Credits are indicated by parentheses. Prepare a worksheet to produce consolidated balances. (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 Consolidated Totals column should be entered with a minus sign.) Accounts Revenues Cost of goods sold Expenses Interest expense-bonds Interest income-bond investment Loss on extinguishment of bonds Equity in income of Stabler Net Income Retained earnings, 1/1/18 Retained earnings, 1/1/18 Net income Dividends paid Retained earnings, 12/31/18 Cash and receivables Inventory Investment in Stabler Investment in Pavin Land, buildings, and equipment (net) Trademarks Total assets Accounts payable Bonds payable Discount on bonds Common stock Retained earnings Total liabilities and stockholders' equity PAVIN AND STABLER Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Consolidated Pavin Stabler Debit Credit Totals $ (803,000) $ (547,000) $ 164,000 476,000 261,000 7.750 164,000 146,000 179,500 8,150 57,000 0 28,500 0 (24,650) 24,650 0 0 9,100 (131,150) 0 131,150 $ (256,150) $ (131, 150) $ 0 (366,000) 24,450 (403,000) 403,000 (256,150) (131,150) 0 176,000 98,000 98,000 $ (445,150) $ (436,150) $ 0 $ 238,000 $ 56,000 54,000 196,000 108,000 7.750 689,150 0 98,000 ? 0 249,750 249.750 266,000 562,000 ? 0 0 ? ? $ 1,389,150 $ 975,750 $ 0 (125,000) (277.600) 2 (510,000) (121,000) 21,000 0 10,500 (330,000) (141,000) 141,000 (445,150) (436,150) $ (1.389,150) $ (975,750) $ 1,071,250 $ 612,500 $ 0