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Park Corporation paid $24,800 for an 80% interest in Stay Corporation on January 1, 2019, at which time Stay's stockholders' equity consisted of $15,000 of Common Stock and $6,000 of Retained Earnings. The fair values of Stay Corporation's assets and liabilities were identical to recorded book values when Park acquired its 80% interest.

Stay Corporation reported net income of $4,000 and paid dividends of $2,000 during 2019.

Park Corporation sold inventory items to Stay during 2019 and 2020 as follows:

2019 2020

Park's sales to Stay $5,000 $6,000

Park's cost of sales to Stay 3,000 3,500

Unrealized profit at year-end 1,000 1,500

At December 31, 2020, the accounts payable of Stay include $1,500 owed to Park for inventory purchases.

Required:

Complete the working papers to consolidate the financial statements of Park Corporation and subsidiary for the year ended December 31, 2020.

Consolidated Park Stay Eliminations Debit Credit INCOME STATEMENT Sales $43,000 $20,000 income from Stay 6,700 Cost of Sales -22,000 -8,000 Other Expenses -12,200 -3,000 Noncontrolling interest share Net income $15,500 $9,000 Retained Earnings 1/1 $9,000 $8,000 Add: Net income 15,500 9,000 Dividends - 10,000 -5,000 Retained Earnings 12/31 $14,500 $12,000 BALANCE SHEET Cash $5,400 $3,000 Net Receivables 14,000 10,000 Dividends Receivable 2,000 Inventories 18,000 8,000 Goodwill Plant assets-net 24,000 31,000 Investment in Stay 28,100 TOTAL ASSETS $91,500 $52,000 LIAB. & EQUITY Accounts payable $17,500 $12,500 Dividends payable 7,000 2,500 Other Debt 12,500 10,000 Capital Stock 40,000 15,000 Retained Earnings 14,500 12,000 1/1 Noncntrl. Interest 12/31 Noncntrl. Interest TOTAL LIAB. & EQUITIES $91,500 $52,000

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