The Excel worksheet presents the financials statements for Penney and Sirly for the calendar year 2017. Complete the Consolidated 2017 Worksheet (including totals) using the correct Worksheet format used throughout your textbook. You will also need the following information.

Penney Corp. purchased 90% of Sirly Company on January 1, 2016, for $657,000 in cash. On that date, the 10% interest was assessed to have a $73,000 fair value. Also, at the acquisition date, Sirly held equipment (4-year remaining life) undervalued on the financial records by $20,000 and a long term note payable was overvalued by $40,000 (5 year term). The excess purchase price was assigned to previously unrecognized brand names with a 10-year life.

During 2016, Sirly earned net income of $80,000 and paid no dividends. Penney uses the initial value method to account for its investment in Sirly.

Each year Sirly sells Penney inventory at a 20% gross profit rate. Intra-entity sales were $145,000 in 2016 and $160,000 in 2017. On January 1, 2017, 30% of the 2016 transfers were still on hand. On December 31, 2017, 40% of the 2017 transfers were still on hand. Sirly still owed Penney $20,000 on account payable for the inventory.

Penney sold Sirly a building on January 2, 2016. It had cost Penney $100,000 but had $90,000 in accumulated depreciation at the time of this transfer. The price was $25,000 in cash. At that time, the building had a 5 year remaining life.

SPRING 2018							Non-
			Consolidation Entries				Controlling	Consolidated
Accounts	Proctor	Sirly	Label	Debit	Label	Credit	Interest	Totals
Sales	$(791,000)	$(610,000)
Dividend Income	$(18,000)	$-
Cost of Goods Sold	$525,000	$400,000
Depreciation/Amortization Expense	$20,000	$15,000
All Other Expenses	$80,000	$155,000
Separate Net Income	$(184,000)	$(40,000)
Consolidated Net Income								$-
Net Income to Noncontrolling Interest
Net Income to Controlling Interest								$-
Retained Earnings, Proctor, 1/1	$(990,000)
Retained Earnings, Sirly, 1/1		$(560,000)
Net Income	$(184,000)	$(40,000)
Dividends	$130,000	$20,000
Retained Earnings 12/31	$(1,044,000)	$(580,000)						$-
Cash	$101,000	$120,000
Receivables	$160,000	$50,000
Inventory	$224,000	$160,000
Investment in Kirby	$657,000
Equipment (net)	$600,000	$420,000
Buildings (net)	$900,000	$450,000
Other Assets	$200,000	$100,000
Brand Names	$-	$-
Total Assets	$2,842,000	$1,300,000						$-
Accounts Payable	$(170,000)	$(60,000)
Note Payable	$(1,028,000)	$(510,000)
Common Stock	$(600,000)	$(150,000)
Retained Earnings 12/31	$(1,044,000)	$(580,000)
Noncontrolling Interest 1/1	$-	$-
Noncontrolling Interest 12/31	$-	$-
Total Liabilities & Stockholder's Equity	$(2,842,000)	$(1,300,000)		$-		$-		$-