On January 1, 2024, Pikes Corporation loaned Venti Company $300,000 and agreed to guarantee all of Venti’s long-term debt in exchange for (1) decision-making authority over all of Venti’s activities and (2) an annual management fee of 25 percent of Venti’s annual revenues. As a result of the agreement, Pikes becomes the primary beneficiary of Venti (now a variable interest entity). Pikes’s loan to Venti stipulated a 7 percent (market) rate of interest to be paid annually with principal due in 10 years.

On January 1, 2024, Pikes estimated that the fair value of Venti’s equity shares equaled $75,000 while Venti’s book value was $55,000. Any excess fair over book value at that date was attributed to Venti’s trademark with an indefinite life. Because Pikes owns no equity in Venti, all of the acquisition-date excess fair over book value is allocated to the noncontrolling interest.

Venti paid Pikes 25 percent of its 2024 revenues at the end of the year and recorded the payment in other operating expenses. Venti also paid the interest to Pikes for the loan. On December 31, 2024, Pikes and Venti submitted the following statements for consolidation. (Parentheses indicate credit balances.)

Prepare the December 31, 2024, consolidation worksheet for Pikes and its variable interest entity Venti.

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Revenues Management fee. Cost of good sold. Other operating expenses Interest income Interest expense. Net income.. Retained earnings, 1/1.. Net income.... Dividends declared. Retained earnings, 12/31. Current assets. Loan receivable from Venti.. Equipment (net). Trademark Total assets Current liabilities. Loan payable to Pikes Other long-term debt. Common stock Retained earnings, 12/31 Total liabilities and equity. Pikes (792,000) (54,000) 621,000 76,000 (21,000) -0- (170,000) (1,380,000) (170,000) 75,000 (1,475,000) 360,000 300,000 895,000 1,555,000 (30,000) (50,000) (1,475,000) (1,555,000) Venti (216,000) -0- 89,000 64,000 39,000 (24,000) (40,000) (24,000) -0- (64,000) 73,000 -0- 527,000 125,000 725,000 (92,000) (300,000) (254,000) (15,000) (64,000) (725,000)