Pullman, Inc. acquired a controlling interest in Sierra Company on 1/1/20x1. At that time, the book value of Sierra Company's net assets was $16,970,000, includingthe following: BOOK VALUE FAIR VALUE m m Remaining Life Buildings $2,700,000 $3,400,000 7 years Equipment 3,700,000 3,300,000 5 years Land 1,700,000 2,550,000 indenite ln acquiring their controlling interest, Pullman paid $10,450,000 cash in exchange for 55% of the outstanding voting common stock of Sierra. At the time of the acquisition, the fair value of 100% of Sierra's outstanding common stock was $19,000,000. Pullman did not pay a control premium to acquire their 55% controlling interest. Any consideration paid in excess of the fair value of net assets acquired is assigned to goodwill, The account balances for Pullman, Inc. and Sierra Company at 12/31/20x1 are as follows: Pullman, Inci Mm Revenues (298,000,000) (103,750,000) Expenses 271,000,000 95,800,000 Equity in income of Sierra Company (4 361 500) 0 Net income (31 361 500) 7 950 000 Retained earnings, January 1, 20x1 (2,500,000) (100,000) Net income (above) (31,361,500) (7,950,000) Dividends paid 5 000 000 3,000,000 Retained earnings, December 31, 20x1 (28 861 500) (5,050,000) Current Assets 30,500,000 20,800,000 Investment in Sierra Company 13,161,500 Land 1,500,000 1,700,000 Buildings 5,600,000 2,360,000 Equipment (net) 3 100 000 2,960,000 Total assets 53 861 500 27,820,000 Accounts payable (3,100,000) (4,900,000) Notes payable (1,000,000) Common stock (2,900,000) (6,000,000) Additional paid-in capital (19,000,000) (10,870,000) Retained earnings, Dec. 31, 20x1 (above) (28 861 500) (5,050,000) Total liabilities and stockholders' equity (53 861 500) (27,820,000) Non-controlling Adjusting Pullman, Inc. Sierra Company Consolidation Entries Entries Totals J/E Revenues 298,000,000 (103,750,000) Expense 271,000,000 95,800,000 Equity in income of Sierra Company (4,361,500) Separate net income (31,361.500) Z.950,000) Consoldiated net income Net income attributable to NC 10 Net income attributable to Pullman 11 12 Retained earnings, January 1, 20x1 2,500,000) (100,000) 13 Net income (above (31,361,500) (7,950,000 14 Dividends paid 5,000,000 3,000,000 15 Retained earnings, December 31, 20x1 28,861,500) 5,050,000 16 17 Current Assets 30,500,000 20,800,000 18 Investment in Sierra Company 13,161,500 19 Land 1,500,000 1,700,000 20 Buildings 5,600,000 2,360,000 21 Equipment (net) 3,100,000 2,960,000 22 Goodwil 23 Total assets 53,861,500 27.820,000 24 25 Accounts payable (3,100,000 (4,900,000) 26 Notes payable 1,000,000) 27 Common stock 2,900,000) 6,000,000) 28 Additional paid-i capital 19,000,0 10,870,000) 29 Noncontrolling interest in Sierra, 1/1/20x1 30 Noncontrolling interest in Sierra, 12/31/20x: 31 32 Retained earnings, Dec. 31, 20x1 (above) 28,861,500) 5,050,000) 33 Total liabilities and stockholders' equity 53,861.500) 27.820,000 34 35 36 37 38 39 40 42 43