Acme Corporation has been operating profitably since its creation in 1998. At the beginning of 2022, Acme acquired a 70 percent ownership in Beta Company. At the acquisition date, Acme prepared the following fair-value allocation schedule:

Acme regularly buys inventory from Beta at a markup of 25 percent more than cost. Acme’s purchases during 2022 and 2023 and related ending inventory balances follow:

During 2024, Acme acquired additional inventory from Beta at a price of $200,000. Of this merchandise, 45 percent is still held at year-end.

On January 1, 2024, Acme and Beta acted together as co-acquirers of 80 percent of Cade Company’s outstanding common stock. The total price of these shares was $240,000, indicating neither goodwill nor other specific fair-value allocations. Each company put up one-half of the consideration transferred.

Using the three companies’ financial records for 2024, prepare a consolidation worksheet. The equity method has been applied to each investment.

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Consideration transferred for 70% interest in Beta... Fair value of the 30% noncontrolling interest .. Beta business fair value..... Beta book value. Excess fair value over book value.... Assignments to adjust Beta's assets to fair value: To buildings (20-year remaining life). To equipment (4-year remaining life) .. To franchises (10-year remaining life).. To trademarks (indefinite life).. $60,000 (20,000) 40,000 140,000 $ 707,000 303,000 $1,010,000 790,000 $ 220,000 $ 160,000 60,000