Using the acquisition method, prepare the worksheet to consolidate these two companies. (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. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign.)

Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2018, for $778,400 cash. At the acquisition date, Sierra's total fair value, including the noncontrolling interest, was assessed at $973,000 although Sierra's book value was only $674,000. Also, several individual items on Sierra's financial records had fair values that differed from their book values as follows Book Value Fair Value S 60,200 Land Buildings and equipment (10-year remaining life) Copyright (20-year remaining life) Notes payable (due in 8 years) 293, 000 198,000 (204,000) s 310,200 242,000 282,000 (188,000) For internal reporting purposes, Padre, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2018, for both companies Sierra Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra $ (1,461,980) (669, 550) 420,000 10, 500 ,900 6,150 739,000 345,000 49,500 (177,520) Net income Retained earnings, 1/1/18 Net income Dividends declared $(506,000) (223,000) s (1,315,000 (514,000) (506, 000) 260,000 (223,000) 65,000 $ (1,561,000) (672,000) S 695,200 Retained earnings, 12/31/18 Current assets Investment in Sierra Land Buildings and equipment (net) Copyright S 885, 080 903,920 322,000 975,000 60,200 282,500 188,100 $ 1,226,000 0 Total assets S 3, 086,000 $(260,000) (190,000) Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings (above) (204,000) (515,000) (300,000) (450,000) (1,561,000) (100,000) (60,000) (672,000) S (3,086,000) (1, 226, 000) Total liabilities and equities At year-end, there were no intra-entity receivables or payables