Required: 1. Prepare a set of formal consolidated financial statements (income statement, statement of stockholder's equity, and balance sheet) for the current period. 2. Provide supporting documentation (working papers) for the financial statements a. Worksheet b. Calculation of the NCI share of Santana's net income C. Consolidating journal entries (on the worksheet or on a separate page) Information available December 31, 2019 Pink Floyd, Inc. acquired 80 percent of the outstanding common stock of Santana Company on January, 1, 2016 for $368,000 in cash. The remaining shares had a fair value of $92,000 on this date. Santana's assets and liabilities on this date totaled $665,000 and $295,000 respectively. The difference between fair value and Santana's book value was in prat assigned to the following assets and liabilities: Fair Value Book Value Equipment (5 years) 100,000 75,000 Copyrights (20 years) 30,000 10,000 Notes payable (5 years) 35,000 40,000 On January 1, 2019, Santana purchased one half of Pink Floyd's bonds (face value of $300,000 and carrying value of $282,000) on the open market for $145,500. Both Pink Floyd and Santana employ the straight-line method of amortizing discounts and premiums. Santana has consistently sold to Pink Floyd since the acquisition. You are given the following information regarding these sales(purchases): Cost to Santana Amount remaining in ending Year Selling price inventory (at selling price) 2017 50,000 40,000 10,000 2018 60,000 45,000 12,000 2019 40,000 30,000 4,000 Pink Floyd still owes $25,000 on these purchases at December 31, 2019 Pink Floyd sold a parcel of land to Santana, on December 15, 2019, for a price of $40,000. The transaction resulted in a gain of $5,000. Pink Floyd has accounted for its investment in Santana under the equity method. Pink Floyd, Inc. Adjusted Trial Balance December 31, 2019 Credit Debit 50,000 145,000 143,000 497,200 476,200 155,000 60,000 100,000 150,000 300,000 Cash Accounts receivable Inventory Investment in Santana Land, Buildings, and Equipment Accumulated Depreciation Patents Accounts payable Notes payable Bonds payable Discount on bonds payable Common stock Retained earnings Dividends Sales Revenues Cost of Goods Sold Operating expenses Interest expense (bonds) Equity in Santana's income Gain on the sale of land Totals 12,000 300,000 345,000 155,000 760,000 475,000 150,000 36,000 84,400 5,000 2,199,400 $ 2,199,400 $ Santana Company Adjusted Trial Balance December 31, 2019 Credit $ Debit 35,000 60,000 65,000 147,000 550,000 $ 50,000 25,000 Cash Accounts receivable Inventory Investment in bonds Land, Buildings, and Equipment Accumulated Depreciation Copyrights Accounts payable Notes payable Bonds payable Common stock Retained earnings Dividends Sales Revenues Cost of Goods Sold Operating expenses Interest expense (bonds) Interest revenue (bonds) Totals 55,000 50,000 150,000 150,000 360,000 60,000 525,000 265,000 134,000 15,500 16,500 1,356,500 $ 1,356,500 $ Required: 1. Prepare a set of formal consolidated financial statements (income statement, statement of stockholder's equity, and balance sheet) for the current period. 2. Provide supporting documentation (working papers) for the financial statements a. Worksheet b. Calculation of the NCI share of Santana's net income C. Consolidating journal entries (on the worksheet or on a separate page) Information available December 31, 2019 Pink Floyd, Inc. acquired 80 percent of the outstanding common stock of Santana Company on January, 1, 2016 for $368,000 in cash. The remaining shares had a fair value of $92,000 on this date. Santana's assets and liabilities on this date totaled $665,000 and $295,000 respectively. The difference between fair value and Santana's book value was in prat assigned to the following assets and liabilities: Fair Value Book Value Equipment (5 years) 100,000 75,000 Copyrights (20 years) 30,000 10,000 Notes payable (5 years) 35,000 40,000 On January 1, 2019, Santana purchased one half of Pink Floyd's bonds (face value of $300,000 and carrying value of $282,000) on the open market for $145,500. Both Pink Floyd and Santana employ the straight-line method of amortizing discounts and premiums. Santana has consistently sold to Pink Floyd since the acquisition. You are given the following information regarding these sales(purchases): Cost to Santana Amount remaining in ending Year Selling price inventory (at selling price) 2017 50,000 40,000 10,000 2018 60,000 45,000 12,000 2019 40,000 30,000 4,000 Pink Floyd still owes $25,000 on these purchases at December 31, 2019 Pink Floyd sold a parcel of land to Santana, on December 15, 2019, for a price of $40,000. The transaction resulted in a gain of $5,000. Pink Floyd has accounted for its investment in Santana under the equity method. Pink Floyd, Inc. Adjusted Trial Balance December 31, 2019 Credit Debit 50,000 145,000 143,000 497,200 476,200 155,000 60,000 100,000 150,000 300,000 Cash Accounts receivable Inventory Investment in Santana Land, Buildings, and Equipment Accumulated Depreciation Patents Accounts payable Notes payable Bonds payable Discount on bonds payable Common stock Retained earnings Dividends Sales Revenues Cost of Goods Sold Operating expenses Interest expense (bonds) Equity in Santana's income Gain on the sale of land Totals 12,000 300,000 345,000 155,000 760,000 475,000 150,000 36,000 84,400 5,000 2,199,400 $ 2,199,400 $ Santana Company Adjusted Trial Balance December 31, 2019 Credit $ Debit 35,000 60,000 65,000 147,000 550,000 $ 50,000 25,000 Cash Accounts receivable Inventory Investment in bonds Land, Buildings, and Equipment Accumulated Depreciation Copyrights Accounts payable Notes payable Bonds payable Common stock Retained earnings Dividends Sales Revenues Cost of Goods Sold Operating expenses Interest expense (bonds) Interest revenue (bonds) Totals 55,000 50,000 150,000 150,000 360,000 60,000 525,000 265,000 134,000 15,500 16,500 1,356,500 $ 1,356,500 $