Acme Corporation has been operating profitably since its creation in 1998. At the beginning of 2022,...

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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: 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) $ 784,000 336,000 $ 1,120,000 757,000 $ 363,000 $ 107,000 (34,400) 85,500 204,900 363,000 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. Year 2022 2023 Intra-Entity Purchases $ 146,250 171,875 Remaining Intra- Entity Inventory- End of Year (at transfer price) $ 48,750 68,750 During 2024, Acme acquired additional inventory from Beta at a price of $222,000. 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 $252,000, indicating neither goodwill nor other specific fair-value allocations. Each company put up one-half of the consideration transferred. Items Sales and other revenues Cost of goods sold Operating expenses Income of Beta Company Income of Cade Company Net income Retained earnings, 1/1/24 Net income (above) Dividends declared Retained earnings, 12/31/24 Cash and receivables Inventory Investment in Beta Company Investment in Cade Company Buildings Equipment Land Total assets Liabilities Common stock Retained earnings, 12/31/24 Total liabilities and equities Note: Parentheses indicate a credit balance. Acme Corporation $ (1,035,431) 644,000 273,000 (103,929) (31,640) $ (254,000) $ (853,000) (254,000) 100,000 $ (1,007,000) $ 29,676 400,100 948,584 133,640 433,000 362,000 207,000 $ 2,514,000 $ (687,000) (820,000) (1,007,000) Beta Company $ (781,860) 360,000 293,500 (31,640) $ (160,000) $ (654,000) (160,000) 96,000 $ (718,000) $ 225,360 389,000 Cade Company $ (360,500) 187,000 94,400 0 $ (79,100) $ (165,000) (79,100) 60,000 $ (184,100) $ 80,750 28,250 0 133,640 354,000 234,000 93,200 176,000 385,000 $ 1,663,000 $ (635,000) (310,000) (718,000) $ (2,514,000) $ (1,663,000) 20,900 $ 457,100 $ (123,000) (150,000) (184,100) $ (457,100) Required: Using the three companies' financial records for 2024, prepare a consolidation worksheet. The equity method has been applied to each investment. Note: For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values. ACME CORPORATION AND CONSOLIDATED SUBSIDIARIES Consolidation Worksheet December 31, 2024 Accounts Acme Corporation Beta Company Cade Company Debit Consolidation Entries Credit Noncontrolling Consolidated Interest Balance Sales and other revenue Cost of goods sold Operating expenses Income of Beta Company (1,035,431) (781,860) 360,500 644,000 360,000 187,000 273,000 293,500 94,400 (103,929) Income of Cade Company (31,640) (31,640) Net income (254,000) (160,000) 79,100 Consolidated net income 0 Net income attributable to noncontrolling interest (Beta) Net income attributable to noncontrolling interest (Cade) Net income attributable to Acme Corporation Retained earnings, 1/1/24: Acme Corporation Beta Company Cade Company Net income Dividends declared Acme Corporation Beta Company 853,000 654,000 165,000 254,000 160,000 79,100 0 100,000 96,000 Cade Company 60,000 Retained earnings, 12/31/24 (1,007,000) (718,000) 184,100 0 Cash and receivables 29,676 225,360 80,750 Inventory 400,100 389,000 28,250 Investment in Beta Company 948,584 Investment in Cade Company 133,640 133,640 Buildings 433,000 354,000 234,000 Equipment 362,000 176,000 93,200 Land 207,000 385,000 20,900 Trademarks Franchise contracts Total assets Liabilities (2,514,000) (1,663,000) 457,100 (687,000) (635,000) 123,000 Noncontrolling interest in Cade Noncontrolling interest in Beta Noncontrolling interest in subsidiary companies Common stock (820,000) (310,000) 150,000 Retained earnings (1,007,000) (718,000) 184,100 Total liabilities and equities (2,514,000) (1,663,000) 457,100 0 0 0 0 0 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: 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) $ 784,000 336,000 $ 1,120,000 757,000 $ 363,000 $ 107,000 (34,400) 85,500 204,900 363,000 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. Year 2022 2023 Intra-Entity Purchases $ 146,250 171,875 Remaining Intra- Entity Inventory- End of Year (at transfer price) $ 48,750 68,750 During 2024, Acme acquired additional inventory from Beta at a price of $222,000. 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 $252,000, indicating neither goodwill nor other specific fair-value allocations. Each company put up one-half of the consideration transferred. Items Sales and other revenues Cost of goods sold Operating expenses Income of Beta Company Income of Cade Company Net income Retained earnings, 1/1/24 Net income (above) Dividends declared Retained earnings, 12/31/24 Cash and receivables Inventory Investment in Beta Company Investment in Cade Company Buildings Equipment Land Total assets Liabilities Common stock Retained earnings, 12/31/24 Total liabilities and equities Note: Parentheses indicate a credit balance. Acme Corporation $ (1,035,431) 644,000 273,000 (103,929) (31,640) $ (254,000) $ (853,000) (254,000) 100,000 $ (1,007,000) $ 29,676 400,100 948,584 133,640 433,000 362,000 207,000 $ 2,514,000 $ (687,000) (820,000) (1,007,000) Beta Company $ (781,860) 360,000 293,500 (31,640) $ (160,000) $ (654,000) (160,000) 96,000 $ (718,000) $ 225,360 389,000 Cade Company $ (360,500) 187,000 94,400 0 $ (79,100) $ (165,000) (79,100) 60,000 $ (184,100) $ 80,750 28,250 0 133,640 354,000 234,000 93,200 176,000 385,000 $ 1,663,000 $ (635,000) (310,000) (718,000) $ (2,514,000) $ (1,663,000) 20,900 $ 457,100 $ (123,000) (150,000) (184,100) $ (457,100) Required: Using the three companies' financial records for 2024, prepare a consolidation worksheet. The equity method has been applied to each investment. Note: For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values. ACME CORPORATION AND CONSOLIDATED SUBSIDIARIES Consolidation Worksheet December 31, 2024 Accounts Acme Corporation Beta Company Cade Company Debit Consolidation Entries Credit Noncontrolling Consolidated Interest Balance Sales and other revenue Cost of goods sold Operating expenses Income of Beta Company (1,035,431) (781,860) 360,500 644,000 360,000 187,000 273,000 293,500 94,400 (103,929) Income of Cade Company (31,640) (31,640) Net income (254,000) (160,000) 79,100 Consolidated net income 0 Net income attributable to noncontrolling interest (Beta) Net income attributable to noncontrolling interest (Cade) Net income attributable to Acme Corporation Retained earnings, 1/1/24: Acme Corporation Beta Company Cade Company Net income Dividends declared Acme Corporation Beta Company 853,000 654,000 165,000 254,000 160,000 79,100 0 100,000 96,000 Cade Company 60,000 Retained earnings, 12/31/24 (1,007,000) (718,000) 184,100 0 Cash and receivables 29,676 225,360 80,750 Inventory 400,100 389,000 28,250 Investment in Beta Company 948,584 Investment in Cade Company 133,640 133,640 Buildings 433,000 354,000 234,000 Equipment 362,000 176,000 93,200 Land 207,000 385,000 20,900 Trademarks Franchise contracts Total assets Liabilities (2,514,000) (1,663,000) 457,100 (687,000) (635,000) 123,000 Noncontrolling interest in Cade Noncontrolling interest in Beta Noncontrolling interest in subsidiary companies Common stock (820,000) (310,000) 150,000 Retained earnings (1,007,000) (718,000) 184,100 Total liabilities and equities (2,514,000) (1,663,000) 457,100 0 0 0 0 0