PAVIN AND STABLER Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Consolidated Accounts Pavin Stabler Debit Credit Totals Revenues Cost of goods sold Expenses $ 797,000 $ 543,000 $ 195,000 $ 1,145,000 474,000 259,000 144,000 177,500 Interest expense-bonds 55,000 0 Interest income-bond investment 0 23,350 Loss on extinguishment of bonds 0 0 Equity in Stabler's income 129,850 0 Net income $ 253,850 $ 129,850 $ 1,145,000 Retained earnings, 1/1/21 (Pavin) 364,000 Retained earnings, 1/1/21 (Stabler) 399,000 Net income 253,850 129,850 Dividends declared 174,000 96,000 Retained earnings, 12/31/21 $ 443,850 $ 432,850 $ 0 Cash and receivables $ 236,000 $ 54,000 Inventory 194,000 106,000 Investment in Stabler 679,850 0 Investment in Pavin bonds 0 240,250 Land, buildings, and equipment (net) 264,000 560,000 Trademarks 0 0 Total assets Accounts payable Bonds payable Discount on bonds $ 1,373,850 $ 960,250 $ 0 131,000 269,400 490,000 119,000 19,000 0 Common stock 328,000 139,000 Retained earnings 443,850 432,850 0 Total liabilities and stockholders' equity $ 1,373,850 $ 960,250 $ 195,000 $ 0 $ 0 Pavin acquires all of Stabler's outstanding shares on January 1, 2018, 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, 2021, 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 2021, 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, 2021. Dividends were both declared and paid during the current year. 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 $ Pavin (797,000) Stabler $ (543,000) 474,000 259,000 144,000 177,500 55,000 0 0 (23,350) 0 0 (129,850) 0 $ (253,850) $ (129,850) $ (364,000) $ (399,000) (253,850) 174,000 (129,850) 96,000 $ (443,850) $ (432,850) $ 236,000 $ 54,000 194,000 106,000 679,850 0 0 264,000 240,250 560,000 0 0 $ 1,373,850 $ 960,250 $ $ (269,400) Accounts payable Bonds payable Discount on bonds Common stock Retained earnings (above) Total liabilities and stockholders' equity (131,000) (490,000) 19,000 (328,000) (443,850) $ (1,373,850) (119,000) (139,000) (432,850) $ (960,250) 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. Input all amounts as positive values.)