Padre, Inc., buys 80 percent of the outstanding common stock ofSierra Corporation on January 1, 2018, for $754,080 cash. At theacquisition date, Sierra’s total fair value, including thenoncontrolling interest, was assessed at $942,600 although Sierra’sbook value was only $659,000. Also, several individual items onSierra’s financial records had fair values that differed from theirbook values as follows:

	Book Value				Fair Value
Land	$	63,000			$	297,000
Buildings and equipment (10-yearremaining life)		355,000				311,000
Copyright (20-year remaininglife)		137,000				217,000
Notes payable (due in 8years)		(155,000	)			(141,400	)

For internal reporting purposes, Padre, Inc., employs the equitymethod to account for this investment. The following accountbalances are for the year ending December 31, 2018, for bothcompanies.

	Padre				Sierra
Revenues	$	(1,427,540	)		$	(657,900	)
Cost of goods sold		752,000				413,000
Depreciation expense		292,000				11,500
Amortization expense		0				6,850
Interest expense		43,500				6,550
Equity in income of Sierra		(174,960	)			0
Net income	$	(515,000	)		$	(220,000	)
Retained earnings, 1/1/18	$	(1,362,500	)		$	(499,000	)
Net income		(515,000	)			(220,000	)
Dividends declared		260,000				65,000
Retained earnings, 12/31/18	$	(1,617,500	)		$	(654,000	)
Current assets	$	941,460			$	650,350
Investment in Sierra		877,040				0
Land		308,000				63,000
Buildings and equipment(net)		924,000				343,500
Copyright		0				130,150
Total assets	$	3,050,500			$	1,187,000
Accounts payable	$	(218,000	)		$	(218,000	)
Notes payable		(465,000	)			(155,000	)
Common stock		(300,000	)			(100,000	)
Additional paid-in capital		(450,000	)			(60,000	)
Retained earnings (above)		(1,617,500	)			(654,000	)
Total liabilities andequities	$	(3,050,500	)		$	(1,187,000	)

At year-end, there were no intra-entity receivables orpayables.

Using the acquisition method, prepare the worksheet toconsolidate these two companies. (For accounts wheremultiple consolidation entries are required, combine all debitentries into one amount and enter this amount in the debit columnof the worksheet. Similarly, combine all credit entries into oneamount and enter this amount in the credit column of the worksheet.Amounts in the Debit and Credit columns should be entered aspositive. Negative amounts for the Noncontrolling Interest andConsolidated Totals columns should be entered with a minussign.)