Complete the consolidation worksheet below. All consolidation entry values need to be linked to the trial balance or other tabs. If any additional schedules are needed, place them below the consolidation worksheet.
Equity Method Consolidated Worksheet - For the Year Ended 12/31/2024
Accounts	Trial Balance	Consolidation Entries	Noncontrolling Interest	Consolidated
Prairie View	Stony Harbor	(JE ref)	Debit	(JE ref)	Credit	Totals
Revenues and Gains	850,000	750,000						(100,000)
Cost of Goods Sold	680,000	602,000						1,282,000
Operating Expenses	145,000	105,000	E	25,500	E	(21,000)		254,500
Income of Stony Harbor	16,000							16,000
Net Income	41,000	43,000						(41,000)
Net Income attributable to NCI							(8,600)
Net Income attributable to Prairie View
Retained Earnings - Prairie View 1/1	1,074,605							1,074,605
Retained Earnings - Stony Harbor 1/1		184,000	S	184,000				368,000
Net Income (above)	41,000	43,000						(41,000)
Dividends Declared	95,000	16,000			D	(16,000)	3,200	95,000
Retained Earnings 12/31	1,020,605	211,000						(1,020,605)
Cash	156,000	115,490						271,490
Accounts Receivable	305,000	93,250			P	(20,000)		378,250
Inventory	595,000	160,750			G	(2,758)		752,992
Investment in Stony Harbor	418,000		D	16,000	S	(409,000)		(51,333)
					A	(76,333)
					I	2,800
Land	125,000	84,000			TL	(8,000)		201,000
Equipment (net)	463,580	51,000	E	21,000	A	(20,000)		515,580
Software (net)	59,375	19,000	A	9,333				87,708
Customer List			A	36,000	E	(25,500)		10,500
Goodwill			A	51,000				51,000
Total Assets	2,121,955	523,490						2,121,955
Liabilities	451,350	87,490	P	20,000
Common Stock	50,000	20,000	S	20,000				(50,000)
Additional Paid-in Capital	600,000	205,000	S	205,000				(600,000)
Noncontrolling Interest in Stony Harbor, 1/1							(75,200)
Noncontrolling Interest in Stony Harbor, 12/31							(80,600)
Retained Earnings (above)	1,020,605	211,000						(1,020,605)
Total Liabilities and Equity	2,121,955	523,490		587,833		(595,791)		(2,121,955)
	-	-						4,243,910

Particulars:

This tab contains details needed for the project. Formulas are highlighted in gray. When completing the different parts, link all cells. No cells should be hard coded. Do not fill in or change anything on this tab. All work will be completed on subsequent tabs.
PROJECT FACTS			Stony Harbor Balance Sheet 1/1/2023
Ownership (no dissolution)	80%		Assets
Acquisition Date	1/1/2023		Cash	41,700
Consideration (paid in cash)	$ 396,000		Accounts Receivable	95,600
Fair value of NCI	$ 99,000		Inventory	185,200
			Land	46,000
			Equipment (net)	85,000
STONY HARBOR FAIR VALUES AT ACQUISITION			Software (net)	25,000
Equipment (5 year remaining useful life)	$ 105,000		Total Assets	478,500
Software (3 year remaining useful life)	$ 28,000
Customer list (10 year useful life - currently unrecognized)	$ 45,000		Liabilities and Equity
			Liabilities	102,500
INTRAENTITY TRANSACTIONS
Prairie View sold Land to Stony Harbor on 1/2/2024. They still hold the land at the end of 2024.		Common Stock	20,000
Sale Price	$ 38,000		Additional Paid-in Capital	205,000
Book Value	$ 30,000		Retained Earnings	151,000
			Total Liabilities and Equity	478,500
Stony Harbor sold inventory to Prairie View in 2024.
Sales price	$ 66,000		STONY HARBOR'S RETAINED EARNINGS CHANGES
Cost	$ 52,000		2023 Income	$ 45,000
Gross Profit %	21%		2023 Dividends	$ 12,000
% Remaining at yearend	25%		2024 Income	$ 43,000
			2024 Dividends	$ 16,000
Prairie View owes Stony Harbor at the end of 2024	$ 20,000

Complete the fair-value allocation schedule, calculate the excess fair-value amortizations, and record the acquisition journal entry.
Acquisition Journal Entry
Investment in Stony Harbor	396,000
Cash	396,000
Fair-Value Allocation Schedule
Fair Value of Consideration transferred by Prairie View	495000
Book Value of Stony Harbor	-376000
Excess of Fair Value over Book Value	119000
Equipment	20000
Software	3000
Customer list	45000
Goodwill	51000
Goodwill Allocation Schedule
CI	NCI	Total
396,000	99,000	495,000
355,200	88,800	444,000
40,800	10,200	51,000
In the space below, create a schedule showing the changes in the Investment in Stony Harbor account from acquisition on 1/1/2023 through 12/31/2024 for the equity method. This will be helpful for your consolidation worksheet in part 3. This is similar to exhibits 5.3 or 4.4 in your textbook. Make sure you pay attention to downstream vs. upstream. The difference is discussed on page 227.
Initial investment, 1/1/23	396,000
Dividends	(9,600)
Income of Stony Harbor	36,000
Amortization	(7,600)
Investment in Stony Harbor 12/31/23	414,800
Dividends	(12,800)
Income of Stony Harbor	34,400
Amortization	(7,600)
Deferred profit	(2,800)
Deferred gain on sale of land	(8,000)
Investment in Stony Harbor 12/31/24	418,000

Answer rating: 100% (QA)

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