Plaza, Inc., acquires 80 percent of the outstanding common stock of Stanford Corporation on January 1, 2021, in exchange for $1,080,000 cash. At the acquisition date, Stanford's total fair value, including the noncontrolling interest, was assessed at $1,350,000. Also at the acquisition date, Stanford's book value was $555,700. Several individual items on Stanford's financial records had fair values that differed from their book values as follows: Book Value Fair Value $292,900 $459,600 Trade names (indefinite life) Property and equipment (net, 8-year remaining life) Patent (14-year remaining life) 231, 200 147,800 252,800 182,800 For internal reporting purposes, Plaza, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2021, for both companies. Revenues Cost of goods sold Depreciation expense Amortization expense Equity in income of Stanford Net income Plaza $ (940, 800) 520, 100 220,500 0 (270,400) $ (470,600) Stanford $ (727, 100) 322,200 28,900 32,800 0 $ (343,200) Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 $(1,038,000) (470,600) 244,300 $(1,264,300) $ (431,200) (343,200) 27,000 $ (747,400) Current assets Investment in Stanford Trade names Property and equipment (net) Patents Total assets $ 700,200 1,328,800 195,400 838,600 0 $ 3,063,000 $ 351,700 0 292,900 202,300 115,000 $ 961,900 Accounts payable Common stock Additional paid-in capital Retained earnings (above) Total liabilities and equities $ (115,700) (244,400) (1,438,600) (1,264,300) $(3,063,000) $ (90,000) (80,000) (44,500) (747,400) $(961,900) At year-end, there were no intra-entity receivables or payables. Prepare a worksheet to consolidate the financial statements of Plaza, Inc., and its subsidiary Stanford. (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.) Noncontrolling Interest Consolidated Totals Accounts $ Revenues Cost of goods sold Depreciation expense Amortization expense Equity in income of Stanford Net income Consolidated net income NCI share of CNI Plaza share of CNI Retained earnings, 1/1/21 Net income PLAZA CORPORATION AND STANFORD CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Plaza Stanford Debit Credit (940,800) $ (727,100) 520,100 322,200 220,500 28,900 32,800 (270,400) (470,600) $ (343,200) $ $ $ $ (1,038,000) $ (431,200) (470,600) (343,200) 244,300 27,000 (1,264,300) $ (747,400) 700,200 $ 351,700 1,328,800 0 195,400 292,900 838,600 202,300 0 115,000 Dividends declared Retained earnings, 12/31/21 Current assets Investment in Stanford Tradenames Property and equipment (net) Patents Goodwill Total assets Accounts payable Common stock Additional paid-in capital Noncontrolling interest Retained earnings, 12/31 Total liabilities and equities $ 3,063,000 $ (115,700) (244,400) 961,900 (90,000) (80,000) (1,438,600) (44,500) (1,264,300) (3,063,000) $ (747,400) (961,900) $ $ 0 $ 0
