Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2024, for $802,720 cash. At the acquisition date, Sierra’s total fair value, including the noncontrolling interest, was assessed at $1,003,400, although Sierra’s book value was only $690,000. Also, several individual items on Sierra’s financial records had fair values that differed from their book values as follows:

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, 2024, for both companies:

At year-end, there were no intra-entity receivables or payables.

Prepare a worksheet to consolidate the financial statements of these two companies.

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Land Buildings and equipment (10-year remaining life) Copyright (20-year remaining life). Notes payable (due in 8 years) Book Value $ 65,000 287,000 122,000 (176,000) Fair Value $ 290,000 263,000 216,000 (157,600)