1. prepare the consolidation worksheet entries for December 31, 2021;
2. prepare the consolidation worksheet entries for December 31, 2022. Assuming during 2022, Sierra reports net income of 200,000 and paid dividends of 70,000. USE THE FORMAT BELOW BUT DO NOT USE THE NUMBERS BECAUSE THEY ARE NOT CORRECT. THIS IS JUST TO GIVE YOU THE WORKSHEET FORMAT ANS ACCOUNT NAMES.

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Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2021, 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: Land Buildings and equipment (10-year remaining life) Copyright (20-year remaining life) Notes payable (due in 8 years) Book Value Fair Value $ 65,000 $ 290,000 287,000 263,000 122,000 216,000 (176,000) (157,600) 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, 2021, for both companies. Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra Net income Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 Current assets Investment in Sierra Land Buildings and equipment (net) Copyright Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings (above) Total liabilities and equities Page 207 Padre Sierra $(1,394,980) $ (684,900) 774,000 432,000 274,000 0 52,100 (177,120) $ (472,000) $(1,275,000) (472,000) 260,000 $(1,487,000) $ 856,160 927,840 360,000 909,000 -0- (541,000) 11,600 6,100 9,200 -0- $ (226,000) $ (530,000) (226,000) 65,000 $ (691,000) $ 764,700 -0- 65,000 275,400 115,900 $ 1,221,000 $ 3,053,000 $ (275,000) S (194,000) (176,000) (300,000) (100,000) (450,000) (60,000) (1,487,000) $(3,053,000) (691,000) $(1,221,000) Page 208 At year-end, there were no intra-entity receivables or payables. colideto the Anancial stat of the tion Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2021, 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: Land Buildings and equipment (10-year remaining life) Copyright (20-year remaining life) Notes payable (due in 8 years) Book Value Fair Value $ 65,000 $ 290,000 287,000 263,000 122,000 216,000 (176,000) (157,600) 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, 2021, for both companies. Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra Net income Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 Current assets Investment in Sierra Land Buildings and equipment (net) Copyright Total assets Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings (above) Total liabilities and equities Page 207 Padre Sierra $(1,394,980) $ (684,900) 774,000 432,000 274,000 0 52,100 (177,120) $ (472,000) $(1,275,000) (472,000) 260,000 $(1,487,000) $ 856,160 927,840 360,000 909,000 -0- (541,000) 11,600 6,100 9,200 -0- $ (226,000) $ (530,000) (226,000) 65,000 $ (691,000) $ 764,700 -0- 65,000 275,400 115,900 $ 1,221,000 $ 3,053,000 $ (275,000) S (194,000) (176,000) (300,000) (100,000) (450,000) (60,000) (1,487,000) $(3,053,000) (691,000) $(1,221,000) Page 208 At year-end, there were no intra-entity receivables or payables. colideto the Anancial stat of the tion

Answer rating: 100% (QA)

To prepare the consolidation worksheet entries for December 31 2021 and December 31 2022 we need to follow the steps outlined in the consolidation process Heres how to do it Consolidation Worksheet En... View the full answer