PROBLEM 67 Upstream WorkpaperCost Method LO 6 Paque Corporation owns 90% of the common stock of Segal Company. The stock was purchased for $810,000 on January 1, 2017, when Segal Company's retained earnings were $150,000. Financial data for 2021 are presented here:

Paque Corporation Segal Company

Sales $1,650,000 $ 795,000

Dividend Income 54,000

Total Revenue 1,704,000 795,000

Cost of Goods Sold:

Beginning Inventory 225,000 165,000

Purchases 1,275,000 525,000

Cost of Goods Available 1,500,000 690,000

Less: Ending Inventory 210,000 172,500

Cost of Goods Sold 1,290,000 517,500

Other Expenses 310,500 206,250

Total Cost and Expense 1,600,500 723,750

Net Income $ 103,500 $ 71,250

1/1 Retained Earnings 811,500 180,000

Net Income 103,500 71,250

Dividends Declared (150,000) (60,000)

12/31 Retained Earnings $ 765,000 $ 191,250

Cash $ 93,000 $ 75,000

Accounts Receivable 319,500 168,750

Inventory 210,000 172,500

Investment in Segal Company 810,000

Other Assets 750,000 630,000

Total Assets $2,182,500 $1,046,250

Accounts Payable $ 105,000 $ 45,000

Other Current Liabilities 112,500 60,000

Capital Stock 1,200,000 750,000

Retained Earnings 765,000 191,250

Total Liabilities and Equity $2,182,500 $1,046,250

The January 1, 2021, inventory of Paque Corporation includes $45,000 of profit recorded by Segal Company on 2020 sales. During 2021, Segal Company made intercompany sales of $300,000 with a markup of 20% of selling price. The ending inventory of Paque Corporation includes goods purchased in 2021 from Segal Company for $75,000.

a)Prepare the consolidated statements workpaper for the year ended December 31, 2021.

b)Prepare a taccount calculation of controlling interest in consolidated net income for the year ended December 31, 2021.