The Peregrine Corporation acquired 80 percent of the 100,000 outstanding voting shares of Sprano, Inc., for $7.20 per share on January 1, 2020. The remaining 20 percent of Sprano's shares traded actively at $4.76 per share before and after Peregrine's acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Sprano's underlying accounts except that a building with a 5-year future life was undervalued (i.e., book value is lower than fair value) by $85,500 and a fully amortized trademark (i.e., zero book value) with an estimated 10-year remaining life had a $64,000 fair value. At the acquisition date, Sprano reported common stock of $100,000 and a retained earnings balance of $226,500.

Following are the separate financial statements for the year ending December 31, 2021:

Credit balances are in parentheses. At year-end, there were no intra-entity receivables or payables.

Use the provided worksheet (in Excel) to consolidate these two companies as of December 31, 2021 and do the following:

• Determining the consolidated totals

Peregrine Corporation $ (641,000) 198,000 273,000 (58,800) $ (228,800) (799,200) (228,800) 70,000 $ (958,000) 121,000 656,000 887,000 149,000 $ 1,813,000 (535,000) (320,000) (958,000) $ (1,813,000) Sales Cost of goods sold Operating expenses Equity income Net income Retained earnings, 1/1 Net income (above) Dividends declared Retained earnings, 12/31 Current assets Investment in Sprano Buildings and equipment (net) Trademarks Total assets Liabilities Common stock Retained earnings, 12/31 (above) Total liabilities and equities Sprano Inc. $ (399,000) 176,000 126,000 -0- $ (97,000) (296,500) (97,000) 20,000 $ (373,500) 120,500 -0- 335,000 236,000 $ 691,500 (218,000) (100,000) (373,500) $ (691,500) $ Consolidated Totals A B D E F G H 3 For Year Ending December 31, 2021 Label entries 4 5 Peregrine Sprano Consolidation Entries Noncontrolling 6 Accounts Corporation Inc. Debit Credit Interest 7 8 Sales (641,000) (399,000) 9 Cost of goods sold 198,000 176,000 10 Operating expenses 273,000 126,000 11 Equity Income in Sprano (58.800) 12 Separate company net income (228.800) (97,000) 13 Consolidated net income 14 NI attributable to noncontrolling interest 15 NI attributable to Peregrine Corp. 16 17 Retained earings, 1/1 (799,200) (296,500) 18 Net income (above) (228,800) (97.000) 19 Dividends declared 70.000 20.000 20 Retained earnings, 12/31 (958,000) (373,500) 21 22 Current assets 121,000 120,500 23 Investment in Sprano 656,000 24 25 26 27 Buildings and equipment (net) 887,000 335,000 28 Trademarks 149,000 236,000 29 Goodwill 30 Total assets 1.813.000 691,500 31 32 Liabilities (535,000) (218,000) 33 Common stock (320,000) (100,000) 34 Retained earnings, 12/31 (above) (958,000) (373,500) 35 NCI in Sprano, 1/1 36 37 38 NCI in Sprano, 12/31 39 Total liabilities and equities _01.813.000) (691.500 40 41 42 43 Note: Use parentheses to indicate credit balances if a single column is used to show debit/credit balances. Worksheet Peregrine Corporation $ (641,000) 198,000 273,000 (58,800) $ (228,800) (799,200) (228,800) 70,000 $ (958,000) 121,000 656,000 887,000 149,000 $ 1,813,000 (535,000) (320,000) (958,000) $ (1,813,000) Sales Cost of goods sold Operating expenses Equity income Net income Retained earnings, 1/1 Net income (above) Dividends declared Retained earnings, 12/31 Current assets Investment in Sprano Buildings and equipment (net) Trademarks Total assets Liabilities Common stock Retained earnings, 12/31 (above) Total liabilities and equities Sprano Inc. $ (399,000) 176,000 126,000 -0- $ (97,000) (296,500) (97,000) 20,000 $ (373,500) 120,500 -0- 335,000 236,000 $ 691,500 (218,000) (100,000) (373,500) $ (691,500) $ Consolidated Totals A B D E F G H 3 For Year Ending December 31, 2021 Label entries 4 5 Peregrine Sprano Consolidation Entries Noncontrolling 6 Accounts Corporation Inc. Debit Credit Interest 7 8 Sales (641,000) (399,000) 9 Cost of goods sold 198,000 176,000 10 Operating expenses 273,000 126,000 11 Equity Income in Sprano (58.800) 12 Separate company net income (228.800) (97,000) 13 Consolidated net income 14 NI attributable to noncontrolling interest 15 NI attributable to Peregrine Corp. 16 17 Retained earings, 1/1 (799,200) (296,500) 18 Net income (above) (228,800) (97.000) 19 Dividends declared 70.000 20.000 20 Retained earnings, 12/31 (958,000) (373,500) 21 22 Current assets 121,000 120,500 23 Investment in Sprano 656,000 24 25 26 27 Buildings and equipment (net) 887,000 335,000 28 Trademarks 149,000 236,000 29 Goodwill 30 Total assets 1.813.000 691,500 31 32 Liabilities (535,000) (218,000) 33 Common stock (320,000) (100,000) 34 Retained earnings, 12/31 (above) (958,000) (373,500) 35 NCI in Sprano, 1/1 36 37 38 NCI in Sprano, 12/31 39 Total liabilities and equities _01.813.000) (691.500 40 41 42 43 Note: Use parentheses to indicate credit balances if a single column is used to show debit/credit balances. Worksheet