Income Statement	Paul's Pizza Company	Serena's Sauce	Eliminations-DEBIT	Eliminations-CREDIT	Noncontrolling Interest	Consolidated Balances
Sales	1,400,000	800,000
Dividend Income	20,000
Total Revenue	1,420,000	800,000
Cost of Goods Sold	680,000	325,000
Depreciation Expense	50,000	5,000
Other Expense	200,000	190,000
Total Cost and Expense	930,000	520,000
Net/Consolidated Income	490,000	280,000
NonControlling Interest
Net Income to Retained Earnings	490,000	280,000
Retained Earnings Statement
1/1 Retained Earnings	1,500,000	480,000
Net Income from Above	490,000	280,000
Dividends Declared	(50,000)	(25,000)
12/31 Retained Earnings	1,940,000	735,000
Balance Sheet	Paul's Pizza Company	Serena's Sauce	Eliminations-Debit	Eliminations-Credit	Noncontrolling Interest	Consolidated Balances
Cash	95,000	70,000
Accounts Receivable	302,000	90,000
Inventory	450,000	200,000
Investment in Sub Account	990,000
Difference between Implied & Book Value
Building	850,000	585,000
Goodwill
Other Assets	390,000	230,000
Total	3,077,000	1,175,000
Retained Earnings from Above	1,940,000	735,000
Accounts Payable	75,000	30,000					1/1NCI Balance
Other Liabilities	102,000	60,000
Common Stock	960,000	50,000					12/31 NCI Balance
Other Contributed Capital		300,000
Total	3,077,000	1,175,000

Pauls Pizza Company acquired 80% of the outstanding voting common stock of Serenas Sauce Company on January 1, 2020. Pizza Company had effective control over Serenas Sauce Company, and Pauls Pizza Company uses the Cost Method to account for its Investment in Serenas Sauce Company. The purchase price was $990,000 and on the acquisition date Serenas Sauce Company had Capital Stock of $50,000, Other Contributed Capital of $300,000 and Retained Earnings of $375,000. On the acquisition date, the implied value of Serenas Sauce Companys building was in excess of its book value by $150,000 and inventory by $50,000. Of this $50,000 inventory adjustment, one-half of this inventory was sold in 2020, the remainder was sold in 2021. Any remaining difference between Serenas Sauce Companys implied and book value was recorded as goodwill. As of the acquisition date, the building had a remaining estimated useful life of 10 years, and the straight-line method for depreciation is used. The two companies had the additional following intercompany transactions:

1. During 2020, Serenas Sauce Company sold inventory to Pauls Pizza Company. As of December 31, 2020, the remaining inventory from this intercompany sale had a profit of $12,000.

2. During 2021, Pauls Pizza Company sold inventory to Serenas Sauce Company for $310,000. The December 31, 2021 inventory of Serenas Sauce Company included gross profit of $16,400, from goods acquired from Pauls Pizza Company.

Required: 1. Using the Excel workpaper provided, complete the implied value and allocation schedule for the acquisition on January 1, 2020.

2. Prepare the required consolidating and eliminating entries needed for the consolidated financial statements workpaper for the year ended December 31, 2021.

3. Complete a Consolidated Statement Workpaper for the year ended December 31, 2021, using the consolidating and eliminating entries prepared in part 2 above*

4. Using the Consolidated Statement Workpaper, prepare Consolidated Financial Statements, in good form for 2021.

This includes:

1. Consolidated Income Statement for the year ended December 31, 2021.

2. Statement of Retained Earnings as of December 31, 2021.

3. Balance Sheet as of December 31, 2021.