Pavin acquires all of Stablers outstanding shares on January 1, 2018, for $460,000 in cash. Of this amount, $30,000 was attributed to equipment with a 10-year remaining life and $40,000 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, 2021, Pavin reports $300,000 in bonds outstanding with a carrying amount of $282,000. Stabler purchases half of these bonds on the open market for $145,500. During 2021, Pavin begins to sell merchandise to Stabler. During that year, inventory costing $80,000 was transferred at a price of $100,000. All but $10,000 (at sales price) of these goods were resold to outside parties by year end. Stabler still owes $33,000 for inventory shipped from Pavin during December. The following financial figures are for the two companies for the year ending December 31, 2021. Dividends were both declared and paid during the current year.

1. Prepare an ECOBV amortization schedule at the date of acquisition 2. What is the amount of gross profit to be deferred in 2021? 3. What consolidation entries are needed at the end of 2021? 4.Prepare a consolidation worksheet for Pavin and Stabler at December 31, 2021.

Pavin $ (740,000) 455.000 125,000 36,000 Stabler $ (505,000) 240,000 158,500 (16,500) -0- (123.000) $ (247,000) $ (123,000) $ (361,000) (123,000) 61.000 $ (423,000) 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, 1/1/21 Net income (above) Dividends declared Retained earnings, 12/31/21 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 earings (above) Total liabilities and stockholders' equity $ 35,000 87,000 $ (345,000) (247,000) 155.000 $ (437,000) $ 217,000 175,000 613,000 245,000 $ 1,250,000 $ (225,000) (300,000) 12,000 (300,000) (437.000 $(1,250,000) 147,000 541,000 $ 810,000 $ (167,000) (100,000) (120,000) (423.000) $ (810,000)