Pavin acquires all of Stablers outstanding shares on January 1, 2015, for $650,000 in cash. Of this amount, $49,000 was attributed to equipment with a 5-year remaining life and $59,000 was assigned to trademarks expensed over a 10-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 $490,000 in bonds outstanding with a carrying amount of $454,400. Stabler purchases half of these bonds on the open market for $236,100.

During 2018, Pavin begins to sell merchandise to Stabler. During that year, inventory costing $156,000 was transferred at a price of $195,000. All but $29,000 (at sales price) of these goods were resold to outside parties by year-end. Stabler still owes $52,000 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.

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.)

$ Pavin (797,000) 474,000 144,000 55,000 Stabler $ (543,000) 259,000 177,500 (23,350) $ $ Revenues Cost of goods sold Expenses Interest expense-bonds Interest income-bond investment Loss on extinguishment of bonds Equity in Stabler's income Net income Retained earnings, 1/1/18 Net income Dividends paid Retained earnings, 12/31/18 Cash and receivables Inventory Investment in Stabler Investment in Pavin bonds Land, buildings, and equipment (net) Trademarks Total assets Accounts payable Bonds payable Discount on bonds Common stock Retained earnings (above) Total liabilities and stockholders' equity (129,850) (253,850) (364,000) (253,850) 174,000 (443,850) 236,000 194,000 679,850 $ (129,850) $ (399,000) (129,850) 96,000 $ (432,850) $ 54,000 106,000 240, 250 560,000 264,000 $ 960,250 $ (269,400) (119,000) $ 1,373,850 $ (131,000) (490,000) 19,000 (328,000) (443,850) $ (1,373,850) (139,000) (432,850) $ (960,250) Note: Credits are indicated by parentheses. Consolidated Totals PAVIN AND STABLER Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Accounts Pavin Stabler Debit Credit Revenues $ (797,000) $ (543,000) Cost of goods sold 474,000 259,000 Expenses 144,000 177,500 Interest expense-bonds 55,000 Interest income-bond investment (23,350) Loss on extinguishment of bonds Equity in income of Stabler (129,850) Net income $ (253,850) $ (129,850) Retained earnings, 1/1/18 (364,000) Retained earnings, 1/1/18 (399,000) Net income (253,850) (129,850) Dividends paid 174,000 96,000 Retained earnings, 12/31/18 $ (443,850) $ (432,850) Cash and receivables $ 236,000 $ 54,000 Inventory 194.000 106,000 Investment in Stabler 679,850 Investment in Pavin 240,250 Land, buildings, and equipment (net) 264,000 560,000 Trademarks Total assets $ 1,373,850 $ 960,250 Accounts payable (131,000) (269,400) Bonds payable (490,000) (119,000) Discount on bonds 19,000 Common stock (328,000) (139,000) Retained earnings (443,850) (432,850) Total liabilities and stockholders' equity | $ (1,373,850) $ (960,250)