I would like to use this problem to assist with more problems in the future! Thanks.

Pavin acquires all of Stabler's outstanding shares on January 1, 2015, for $560,000 in cash. Of this amount, $40,000 was attributed to equipment with a 10-year remaining life and $50,000 was assigned to trademarks expensed over a 20-year period. Pavin applies the partial equity method so that income is accrued each period based solely on the earnings reported by the subsidiary.

On January 1, 2018, Pavin reports $400,000 in bonds outstanding with a carrying amount of $368,000. Stabler purchases half of these bonds on the open market for $192,000.

During 2018, Pavin begins to sell merchandise to Stabler. During that year, inventory costing $90,000 was transferred at a price of $120,000. All but $20,000 (at sales price) of these goods were resold to outside parties by year-end. Stabler still owes $43,000 for inventory shipped from Pavin during December.

The following financial figures are for the two companies for the year ending December 31, 2018. Dividends were both declared and paid during the current year.

Pavin Stabler

Revenues$ (770,000) $(525,000)

Cost of goods sold 465,000 250,000

Expenses 135,000 168,500

Interest expensebonds 46,000 0

Interest incomebond investment0 (17,500)

Loss on extinguishment of bonds0 0

Equity in Stabler's income (124,000) 0

Net income$ (248,000) $(124,000)

Retained earnings, 1/1/18$ (355,000) $(381,000)

Net income (248,000) (124,000)

Dividends paid 165,000 87,000

Retained earnings, 12/31/18$ (438,000) $(418,000)

Cash and receivables $227,000 $45,000

Inventory 185,000 97,000

Investment in Stabler 638,000 0

Investment in Pavin bonds 0 197,500

Land, buildings, and equipment (net)255,000 551,000

Trademarks 0 0

Total assets $1,305,000 $890,500

Accounts payable $(158,000) $(232,500)

Bonds payable (400,000) (110,000)

Discount on bonds 10,000 0

Common stock (319,000) (130,000)

Retained earnings (above) (438,000) (418,000)

Total liabilities and stockholders' equity $(1,305,000) $(890,500)

Note: Credits are indicated by parentheses.

Create a worksheet to produce consolidated balances.