Padre, Inc., buys 80 percent of the outstanding common stock ofSierra Corporation on January 1, 2018, for $778,400 cash. At theacquisition date, Sierra’s total fair value, including thenoncontrolling interest, was assessed at $973,000 although Sierra’sbook value was only $674,000. Also, several individual items onSierra’s financial records had fair values that differed from theirbook values as follows:

	Book Value				Fair Value
Land	$	60,200			$	310,200
Buildings and equipment (10-year remaining life)		293,000				242,000
Copyright (20-year remaining life)		198,000				282,000
Notes payable (due in 8 years)		(204,000	)			(188,000	)

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	$	(1,461,980	)		$	(669,550	)
Cost of goods sold		739,000				420,000
Depreciation expense		345,000				10,500
Amortization expense		0				9,900
Interest expense		49,500				6,150
Equity in income of Sierra		(177,520	)			0
Net income	$	(506,000	)		$	(223,000	)
Retained earnings, 1/1/18	$	(1,315,000	)		$	(514,000	)
Net income		(506,000	)			(223,000	)
Dividends declared		260,000				65,000
Retained earnings, 12/31/18	$	(1,561,000	)		$	(672,000	)
Current assets	$	885,080			$	695,200
Investment in Sierra		903,920				0
Land		322,000				60,200
Buildings and equipment (net)		975,000				282,500
Copyright		0				188,100
Total assets	$	3,086,000			$	1,226,000
Accounts payable	$	(260,000	)		$	(190,000	)
Notes payable		(515,000	)			(204,000	)
Common stock		(300,000	)			(100,000	)
Additional paid-in capital		(450,000	)			(60,000	)
Retained earnings (above)		(1,561,000	)			(672,000	)
Total liabilities and equities	$	(3,086,000	)		$	(1,226,000	)

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.)