House Corporation has been operating profitably since its creation in 1960. At the beginning of 2019, House acquired a 70 percent ownership in Wilson Company. At the acquisition date, House prepared the following fair-value allocation schedule: $ 819,000 351,000 $ 1,170,000 793,000 $ 377,000 Consideration transferred for 70% interest in Wilson Fair value of the 30% noncontrolling interest Wilson business fair value Wilson book value Excess fair value over book value Assignments to adjust Wilson's assets to fair value: To buildings (26-year remaining life) To equipment (4-year remaining life) To franchises (10-year remaining life) To goodwill (indefinite life) $ 153,000 (23,600) 50,000 179,400 197,600 $ House regularly buys inventory from Wilson at a markup of 25 percent more than cost. House's purchases during 2019 and 2020 and related ending inventory balances follow: Year 2019 2020 Intra-Entity Purchases $127,500 156,250 Remaining Intra-Entity Inventory- End of Year (at transfer price) $42,500 62,500 On January 1, 2021, House and Wilson acted together as co-acquirers of 80 percent of Cuddy Company's outstanding common stock. The total price of these shares was $312,000, indicating neither goodwill nor other specific fair-value allocations. Each company put up one-half of the consideration transferred. During 2021, House acquired additional inventory from Wilson at a price of $225,000. Of this merchandise, 45 percent is still held at year-end. Following are the financial records for the three companies for 2021. $ $ Sales and other revenues Cost of goods sold Operating expenses Income of Wilson Company Income of Cuddy Company Net income Retained earnings, 1/1/21 Net income (above) Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in Wilson Company Investment in Cuddy Company Buildings Equipment Land Total assets Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and equities House Corporation $ (1,054,060) 571,000 299,000 (98, 140) (31,800) $ (314,000) $ (871,000) (314,000) 100,000 $ (1,085, 000) $ 16, 210 401,450 939,540 163,800 439,000 313,000 269,000 $ 2,542,000 (637,000) (820,000) (1,085,000) $ (2,542,000) Wilson Company $ (789, 200) 371,000 278,000 0 (31,800) $ (172,000) $ (611, 000) (172,000) 96,000 $ (687,000) $ 159, 200 418,000 0 163,800 323,000 209,000 374,000 $ 1,647,000 (650,000) (310,000) (687,000) $ (1,647,000) $ Cuddy Company (384,900) 210,000 95,400 0 0 (79,500) (240,000) (79,500) 60,000 (259,500) 75,250 163,650 0 $ 169,000 96,300 23,300 527,500 (118,000) (150,000) (259,500) (527,500) Note: Parentheses indicate a credit balance. Prepare a consolidation worksheet for 2021. The partial equity method based on separate company incomes has been applied to each investment. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.) Noncontrolling Consolidated Interest Balance HOUSE CORPORATION AND CONSOLIDATED SUBSIDIARIES Consolidation Worksheet December 31, 2021 Consolidation Entries House Wilson Cuddy Accounts Debit Credit Corporation Company Company Sales and other revenue 1,054,060 789,200 384,900 Cost of goods sold 571,000 371,000 210,000 Operating expenses 299,000 278,000 95,400 Income of Wilson Company 98,140 Income of Cuddy Company 31,800 31,800 Net income 314,000 172,000 79,500 Consolidated net income Net income attributable to noncontrolling interest (Wilson) Net income attributable to noncontrolling interest (Cuddy) Net income attributable to House Corporation Retained earnings, 1/1/21: House Corporation 871,000 Wilson Company 611,000 Cuddy Company 240,000 Net income 314.000 172,000 79,500 Dividends declared House Corporation 100,000 Wilson Company 96,000 Cuddy Company 60,000 Retained earnings, 12/31/21 1,085,000 687,000 259,500 Cash and receivables 16,210 159,200 75,250 Inventory 401,450 418,000 163,650 163,800 Investment in Wilson Company Investment in Cuddy Company Buildings Equipment Land 939,540 163,800 439,000 313,000 269,000 323,000 209,000 374,000 169,000 96,300 23,300 Goodwill Franchise contracts Total assets 527,500 0 2,542,000 637,000 1,647,000 650,000 Liabilities 118,000 0 Noncontrolling interest in Cuddy Noncontrolling interest in Wilson Noncontrolling interest in subsidiary companies Common stock Retained earnings Total liabilities and equities 820,000 150,000 1,085,000 2,542,000 310,000 687,000 1,647,000 259,500 527,500 0 0 0