Plaza, Inc, acquires 80 percent of the outstanding common stock of Stanford Corporation on January 1, 2021, in exchange for $1,007,100 cash. At the acquisition date, Stanford's total fair value, including the noncontrolling interest, was assessed at $1,258,875. Also at the acquisition date, Stanford's book value was $533,800, Several individual items on Stanford's financial records had fair values that differed from their book values as follows: | Book Value Fair value Trade names (indefinite life) $272,600 $405, 100 Property and equipment (net, 8-year remaining life) 225,600 244,800 Patent (14-year remaining life) 130,400 161,200 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. Plaza $ (829,600) 458,600 194,400 Revenues Cost of goods sold Depreciation expense Amortization expense Equity in income of Stanford Net income Stanford $ (681,100) 300,000 28,200 21,300 (261,600) $ (438,200) $(331,600) Retained earnings, 1/1/21 $ (966,500) $ (401,300) U AA HARA Plaza $ (829,600) 458,600 194,400 Revenues Cost of goods sold Depreciation expense Amortization expense Equity in income of Stanford Net income Stanford $ (681,100) 300,000 28, 200 21,300 (261,600) $ (438,200) $ (331,600) Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 $ (966,500) (438,200) 227,400 $(1,177,300) $ (401,300) (331,600) 24,000 $ (708,900) 5 $ 327,300 Current assets Investment in Stanford Trade names Property and equipment (net) Patents Total assets $ 652,000 1,249,500 182,000 781,100 0 $ 2,864,600 272,600 197,400 109,100 $ 906,400 Accounts payable Common stock Additional paid-in capital Retained earnings (above) Total liabilities and equities $ (107,700) (227,500) (1,352, 100) (1,177,300) $(2,864,600) $ (65,000) (118,000) (14,500) (708,900) $ (906,400) 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 PLAZA CORPORATION AND STANFORD CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Plaza Stanford Debit Credit (829,600) $ (681.100) 458,600 300.000 194,400 28.200 0 21.300 (261,600) D (438,200) $ (331.600) s $ (966,500) $ (401,300) RA $ (438,200) $ (331.600) $ $ $ Net income Consolidated net income NCI share of CNI Plaza share of CNI Retained earnings. 1/1/21 Net income Dividends declared Retained earings, 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 (966.500) S (401,300) (438,200) (331.600) 227,400 24,000 (1,177,300) S (708,900) 652,000 $ 327.300 1,249,500 0 182,000 272,600 781,100 197.400 0 109,100 $ 2,864,600 $ (107,700) (227.500) (1.352, 100) 906,400 (65,000) (118,000) (14,500) (1.177.300) (708,900) (2.864,600) $ (906,400) $ 0 $ 0 $
