Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January
1,2021 , for $791,520 cash. At the acquisition date, Sierra's total fair value, including the
noncontrolling interest, was assessed at $989,400 although Sierra's book value was only
$638,000. Also, several individual items on Sierra's financial records had fair values that differed
from their book values as follows: For internal reporting purposes, Padre, Inc., employs the
equity method to account for this investment. The following account balances are for the year
ending December 31,2021 , for both companies.
At year-end, there were no intra-entity receivables or payables. Prepare a worksheet to
consolidate the financial statements of these two companies. (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.).
Padre, Inc., buys 80 percent of the outstanding common stock of Sierr.pdf
1. Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January
1,2021 , for $791,520 cash. At the acquisition date, Sierra's total fair value, including the
noncontrolling interest, was assessed at $989,400 although Sierra's book value was only
$638,000. Also, several individual items on Sierra's financial records had fair values that differed
from their book values as follows: For internal reporting purposes, Padre, Inc., employs the
equity method to account for this investment. The following account balances are for the year
ending December 31,2021 , for both companies.
At year-end, there were no intra-entity receivables or payables. Prepare a worksheet to
consolidate the financial statements of these two companies. (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.)
