Priya Corporation acquired 70 percent of Sheldon Company stock on January 1, 2020 for $685,300 cash. The fair market value of the 30 percent noncontrolling interest on this date was $293,700. Following are trial balances of Priya Corporation and Sheldon Company as of December 31, 2020- Cash Accounts Receivable Inventory Investment in Sheldon Corp. Buildings Land Equipment Cost of Goods Sold Depreciation Expense, Building Depreciation Expense, Equipment Selling & Administrative Expense Dividends Declared Accumulated Depreciation, Bldg Accumulated Depreciation, Equip Accounts Payable Bonds Payable Common Stock ($1 par) Additional Paid In Capital Retained Earnings (01/01/2020) Sales Income from Sheldon Corp. $ $ $ $ $ $ $ $ $ $ $ $ PRIYA CORPORATION Debit Credit 836,300 249,000 437,000 735,210 652,000 709,000 513,000 328,000 56,800 43,100 137,000 70,000 $ 227,200 $ 172,400 $ 187,000 $ 450,000 $ 695,000 $ 1,258,500 $ 908,000 $ 790,400 $ 77,910 4,766,410 $ 4,766,410 SHELDON COMPANY Debit Credit $ 262,700 $ 149,000 $ 195,000 $ $ 169,000 $ 283,000 $ 232,000 $ 207,000 $ 19,200 $ 23,400 $ 116,800 $ 40,000 $ 57,600 $ 93,600 $ 174,900 $ 78,400 $ 273,000 $ 348,000 $ 159,000 $ 512,600 $ $ 1,697,100 $ 1,697,100 $ Additional Information: 1. On January 1, 2020 the fair market value of Sheldon's assets equaled their book value with the exception of: Inventory-was undervalued by $10,000 (all this inventory was sold during 2020). Building - was undervalued by $85,000 (remaining useful life was estimated to be 10 years). Land - was by overvalued $24,000. Equipment - was overvalued by $28,000 (remaining useful life was estimated to be 4 years). The new Goodwill from the acquisition was impaired by $23,400 at year-end. 2. Priya Corporation uses the (full) equity method to account for its Investment in Sheldon Company 3. The general ledger numbers given above (HINT: those in boldface) include the effects of the JOURNAL ENTRIES that were recorded by Priya at the acquisition date and during 2020 to account for its investment in Sheldon Company. These boldface figures should be used a check figures in your solution. 1 e. Prepare the consolidation worksheet for the period ended December 31, 2020. You may use the template provided below OR the template on the next page. (50 POINTS) PRIYA CORPORATION Consolidation Worksheet For the Period Ending December 31, 2020 PRIYA'S G/L SHELDON'S G/L CONSOLIDATION ENTRIES Debit Credit Consolidated Totals Accounts $ $ $ $ $ $ Income Statement Sales Less: Cost of Goods Sold Less: Depreciation Expense, Building Less: Depreciation Expense, Equipment Less: Selling & Administrative Expense Less: Goodwill Impairment Loss Income from Sheldon Corp. Consolidated Net Income NCI in Net Income Controlling Interest in Net Income 790,400 (328,000) 156,800) 143,100) (137.000) 512,600 (207,000) (19,200) (23,400) (116,800) $ $ $ $ 77,910 303.410 146,200 $ 303,410 $ 146,200 Statement of Retained Eamings Retained Earnings (01/01/2020) Net Income (above) Dividends Declared Retained earnings, 12/31/20 $ $ $ $ 908,000 $ 303,410 $ 170,000 $ 1,141 410 S 159,000 146,200 (40,000) 265,200 Balance Sheet Cash Accounts Receivable Inventory Investment in Sheldon Corp. unu $ $ $ 836,300 249,000 437,000 735,210 $ $ $ 262,700 149,000 195,000 Buildings Land Equipment Accumulated Depreciation, Bldg Accumulated Depreciation Equip Goodwill (NEW) Total Assets $ $ $ $ $ 652.000 $ 709,000 $ 513,000 $ [227,200) $ (172.400) $ 169,000 283,000 232,000 (57,600) (93,600) $ 3.731 910 1,139,500 Accounts Payable Bonds Payable Common Stock 51 par) Additional Paid in Capital Retained earnings, 12/31/20 (above) NCI in Net Assets $ $ $ $ $ 187.000 450,000 695.000 1,258,500 1,141,410 $ $ $ $ $ 174,900 78,400 273,000 348,000 265,200 Total Liabilities & Stockholders' Equity $ 3,731,910 $ 1,139,500 $ 1,192,700 $ 1,192,700 NET ASSETS (CONTROLLING INTEREST) ASSETS - LIABILITIES. NOINA ASSETS - LIABILITIES TOTAL STOCKHOLDERS' EQUITY TOTAL STOCKHOLDERS' EQUITY (CONTROLLING INTEREST)