Pipe Manufacturing Company acquired 90 percent of Spike Corporations outstanding common stock on December 31, 2017, for $2,282,850. At the date of acquisition, the fair value of the noncontrolling interest was $253,650 and Spike reported common stock outstanding of $1,021,250, premium on common stock of $338,580, and retained earnings of $684,000. The book values and fair values of Spikes assets and liabilities were equal, except for land, which was worth $224,580 more than its book value.

Since the date it was acquired by Pipe Manufacturing, Spike has sold inventory on account to Pipe on a regular basis. The amount of such intercompany sales totaled $196,365 in 2018 and $347,130 in 2019; the gross profit was 42 percent in both years. All inventory transferred in 2018 had been sold by December 31, 2018, except inventory which Pipe paid $41,325 and did not resell until January 2019. All 2018 inventory transactions on account had been satisfied prior to the end of the year. Inventory transferred in 2019 had been resold at December 31, 2019, except merchandise for which Pipe had paid $78,850. An account balance of $44,650 remained unpaid on 2019 inventory transactions.

On January 1, 2018, Spike sold equipment to Pipe for $213,750. Spike had purchased the equipment for $352,450 on January 1, 2016 and was depreciating it on a straight-line basis with a 10-year expected life and no anticipated salvage value. The equipments total expected life is unchanged as a result of the intercompany sale. Spike reported $50,000 net income for 2018 but declared no dividends.

As of December 31, 2019, Spike had declared fourth-quarter dividend; however 25% of the declared amount had not been paid out, resulting in a receivable. Both Pipe and Spike use straight-line depreciation and amortization. On December 31, 2019, Pipes management determined that the carrying value of the reporting unit to which goodwill is assigned is $1,771,750, and the fair value of the reporting unit is $1,616,000. Goodwill impairments, if any, should be shared proportionately between controlling and noncontrolling interests. Pipe uses the basic equity method to account for its investment in Spike.

As a staff of the financial reporting team, your task is to prepare the consolidated financial statements for December 31, 2019.

At December 31, 2019, trial balance for Pipe and Spike appeared as follows:

		Pipe Manufacturing			Spike Corporation
Item		Debit	Credit		Debit	Credit
Cash		2,362,032			272,033
Current Receivables		138,985			234,208
Inventory		253,650			376,675
Investment in Spike Stock		2,578,372
Land		1,770,325			852,644
Building and Equipment		3,101,750			1,915,533
Cost of Goods Sold		3,492,704			807,628
Depreciation and Amortization		253,650			281,675
Other Expenses		801,468			291,983
Dividends Declared		118,750			346,750
Accumulated Depreciation			1,561,639			917,083
Current Payables			112,513			224,113
Bonds Payable			380,000			0
Common Stock			1,601,890			1,021,250
Premium on Common Stock			1,553,279			338,580
Retained Earnings, January 1			2,874,700			734,000
Sales			6,038,580			1,969,825
Other Income			224,583			174,278
Income from Subsidiary			524,502
Total		14,871,685	14,871,685		5,379,128	5,379,128