Pavin acquires all of Stablers outstanding shares on January 1, 2015, for $580,000 in cash. Of this amount, $42,000 was attributed to equipment with a 10-year remaining life and $52,000 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 $420,000 in bonds outstanding with a carrying amount of $387,200. Stabler purchases half of these bonds on the open market for $201,800.

Problem 6-44 (LO 6-3) Pavin acquires all of Stabler's outstanding shares on January 1, 2015, for $580,000 in cash. Of this amount, $42,000 was attributed to equipment with a 10-year remaining life and $52,000 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 W On January 1, 2018, Pavin reports $420,000 in bonds outstanding with a carrying amount of $387,200. Stabler purchases half of these bonds on the open market for $201,800. During 2018, Pavin begins to sell merchandise to Stabler. During that year, inventory costing $128,000 was transferred at a price of $160,000. All but $22,000 (at sales price) of these goods were resold to outside parties by year-end. Stabler still owes $45,000 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 (776,000) 467,000 137,000 48,000 (529,000) 252,000 Revenues Cost of goods sold Expenses Interest expense-bonds 170,500 0 Interest income-bond investment C (18,800) Loss on extinguishment of bonds (125,300) Equity in Stabler's income $(125,300) (249,300) Net income Retained earnings, 1/1/18 Net income (357,000) (249,300) 167,000 $(385,000) (125,300) S Dividends paid 89,000 (439,300) (421,300) Retained earnings, 12/31/18 47,000 99,000 Cash and receivables 229,000 187,000 647,300 Inventory Investment in Stabler Investment in Pavin bonds 207,000 553,000 Land, buildings, and equipment (net) 257,000 C Trademarks 906,000 1,320,300 Total assets (240,700) (112,000) Accounts payable Bonds payable (152,000) (420,000) 12,000 Discount on bonds Common stock (321,000) (439,300) (132,000) (421,300) Retained earnings (above) $(1,320,300) $ (906,000) Total liabilities and stockholders' equity 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 cred it 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 AND STABLER Consolidation Worksheet For Year Ending December 31, 2018 Consolidated Consolidation Entries Credit Accounts Pavin Stabler Debit Totals (529,000) Revenues (776,000) S Cost of goods sold Expenses 467,000 252,000 170,500 137,000 48,000 C Interest expense-bonds Interest income-bond investment (18,800) Loss on extinguishment of bonds 0 Equity in income of Stabler (125,300) 0 (249,300) S (125,300) Net income Retained earnings, 1/1/18 Retained earnings, 1/1/18 Net income Dividends paid (357,000) (385,000) (249,300) (125,300) 89,000 167,000 (421,300) Retained earnings, 12/31/18 (439,300) Cash and receivables Inventory 47,000 S 229,000 S 187,000 99,000 647,300 C Investment in Stabler Investment in Pavin 207,000 Land, buildings, and equipment (net) Trademarks 257,000 553,000 0 906,000 1,320,300 $ Total assets Accounts payable Bonds payable Discount on bonds (152,000) (240,700) (112,000) (420,000) 12,000 0 (321,000) Common stock (132,000) Retained earnings (439,300) (421,300) (906,000) $ (1,320,300) S Total liabilities and stockholders' equity Problem 6-44 (LO 6-3) Pavin acquires all of Stabler's outstanding shares on January 1, 2015, for $580,000 in cash. Of this amount, $42,000 was attributed to equipment with a 10-year remaining life and $52,000 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 W On January 1, 2018, Pavin reports $420,000 in bonds outstanding with a carrying amount of $387,200. Stabler purchases half of these bonds on the open market for $201,800. During 2018, Pavin begins to sell merchandise to Stabler. During that year, inventory costing $128,000 was transferred at a price of $160,000. All but $22,000 (at sales price) of these goods were resold to outside parties by year-end. Stabler still owes $45,000 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 (776,000) 467,000 137,000 48,000 (529,000) 252,000 Revenues Cost of goods sold Expenses Interest expense-bonds 170,500 0 Interest income-bond investment C (18,800) Loss on extinguishment of bonds (125,300) Equity in Stabler's income $(125,300) (249,300) Net income Retained earnings, 1/1/18 Net income (357,000) (249,300) 167,000 $(385,000) (125,300) S Dividends paid 89,000 (439,300) (421,300) Retained earnings, 12/31/18 47,000 99,000 Cash and receivables 229,000 187,000 647,300 Inventory Investment in Stabler Investment in Pavin bonds 207,000 553,000 Land, buildings, and equipment (net) 257,000 C Trademarks 906,000 1,320,300 Total assets (240,700) (112,000) Accounts payable Bonds payable (152,000) (420,000) 12,000 Discount on bonds Common stock (321,000) (439,300) (132,000) (421,300) Retained earnings (above) $(1,320,300) $ (906,000) Total liabilities and stockholders' equity 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 cred it 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 AND STABLER Consolidation Worksheet For Year Ending December 31, 2018 Consolidated Consolidation Entries Credit Accounts Pavin Stabler Debit Totals (529,000) Revenues (776,000) S Cost of goods sold Expenses 467,000 252,000 170,500 137,000 48,000 C Interest expense-bonds Interest income-bond investment (18,800) Loss on extinguishment of bonds 0 Equity in income of Stabler (125,300) 0 (249,300) S (125,300) Net income Retained earnings, 1/1/18 Retained earnings, 1/1/18 Net income Dividends paid (357,000) (385,000) (249,300) (125,300) 89,000 167,000 (421,300) Retained earnings, 12/31/18 (439,300) Cash and receivables Inventory 47,000 S 229,000 S 187,000 99,000 647,300 C Investment in Stabler Investment in Pavin 207,000 Land, buildings, and equipment (net) Trademarks 257,000 553,000 0 906,000 1,320,300 $ Total assets Accounts payable Bonds payable Discount on bonds (152,000) (240,700) (112,000) (420,000) 12,000 0 (321,000) Common stock (132,000) Retained earnings (439,300) (421,300) (906,000) $ (1,320,300) S Total liabilities and stockholders' equity