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Pavin acquires all of Stablers outstanding shares on January 1, 2018, for $560,000 in cash. Of this amount, $40,000 was attributed to equipment with a 10-year remaining life and $50,000 was assigned to trademarks expensed over a 20-year period. Pavin applies the partial equity method so that income is accrued each period based solely on the earnings reported by the subsidiary.

On January 1, 2021, Pavin reports $400,000 in bonds outstanding with a carrying amount of $368,000. Stabler purchases half of these bonds on the open market for $192,000.

During 2021, Pavin begins to sell merchandise to Stabler. During that year, inventory costing $90,000 was transferred at a price of $120,000. All but $20,000 (at sales price) of these goods were resold to outside parties by year-end. Stabler still owes $43,000 for inventory shipped from Pavin during December.

The following financial figures are for the two companies for the year ending December 31, 2021. Dividends were both declared and paid during the current year.

	Pavin		Stabler
Revenues	$	(770,000	)		$	(525,000	)
Cost of goods sold		465,000				250,000
Expenses		135,000				168,500
Interest expensebonds		46,000				0
Interest incomebond investment		0				(17,500	)
Loss on extinguishment of bonds		0				0
Equity in Stablers income		(124,000	)			0
Net income	$	(248,000	)		$	(124,000	)
Retained earnings, 1/1/21	$	(355,000	)		$	(381,000	)
Net income (above)		(248,000	)			(124,000	)
Dividends declared		165,000				87,000
Retained earnings, 12/31/21	$	(438,000	)		$	(418,000	)
Cash and receivables	$	227,000			$	45,000
Inventory		185,000				97,000
Investment in Stabler		638,000				0
Investment in Pavin bonds		0				197,500
Land, buildings, and equipment (net)		255,000				551,000
Trademarks		0				0
Total assets	$	1,305,000			$	890,500
Accounts payable	$	(158,000	)		$	(232,500	)
Bonds payable		(400,000	)			(110,000	)
Discount on bonds		10,000				0
Common stock		(319,000	)			(130,000	)
Retained earnings (above)		(438,000	)			(418,000	)
Total liabilities and stockholders equity	$	(1,305,000	)		$	(890,500	)

Note: Credits are indicated by parentheses.

Prepare a worksheet to produce consolidated balances. (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.)

\begin{tabular}{|c|c|c|c|c|c|c|c|} \hline \multicolumn{8}{|c|}{ PAVIN AND STABLER } \\ \hline \multicolumn{8}{|c|}{ Consolidation Worksheet } \\ \hline \multicolumn{8}{|c|}{ For Year Ending December 31, 2021} \\ \hline \multirow[b]{2}{*}{ Accounts } & \multirow{2}{*}{\multicolumn{2}{|c|}{ Pavin }} & \multirow{2}{*}{\multicolumn{2}{|c|}{ Stabler }} & \multicolumn{2}{|c|}{ Consolidation Entries } & \multirow{2}{*}{ConsolidatedTotals} \\ \hline & & & & & Debit & Credit & \\ \hline Revenues & $ & 770,000 & $ & 525,000 & & & \\ \hline Cost of goods sold & & 465,000 & & 250,000 & & & \\ \hline Expenses & & 135,000 & & 168,500 & & & \\ \hline Interest expense-bonds & & 46,000 & & 0 & & & \\ \hline Interest income-bond investment & & 0 & & 17,500 & & & \\ \hline Loss on extinguishment of bonds & & 0 & & 0 & & & \\ \hline Equity in Stabler's income & & 124,000 & & 0 & & & \\ \hline Net income & $ & 248,000 & $ & 124,000 & & & \\ \hline Retained earnings, 1/1/21 (Pavin) & & 355,000 & & & & & \\ \hline Retained earnings, 1/1/21 (Stabler) & & & & 381,000 & & & \\ \hline Net income & & 248,000 & & 124,000 & & & \\ \hline Dividends declared & & 165,000 & & 87,000 & & & \\ \hline Retained earnings, 12/31/21 & $ & 438,000 & $ & 418,000 & & & \\ \hline Cash and receivables & $ & 227,000 & $ & 45,000 & & & \\ \hline Inventory & & 185,000 & & 97,000 & & & \\ \hline Investment in Stabler & & 638,000 & & 0 & & & \\ \hline Investment in Pavin bonds & & 0 & & 197,500 & & & \\ \hline Land, buildings, and equipment (net) & & 255,000 & & 551,000 & & & \\ \hline Trademarks & & 0 & & 0 & & & \\ \hline Total assets & $ & 1,305,000 & $ & 890,500 & & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|} \hline Accounts payable & & 158,000 & 232,500 & & & \\ \hline Bonds payable & & 400,000 & 110,000 & & & \\ \hline Discount on bonds & & 10,000 & 0 & & & \\ \hline Common stock & & 319,000 & 130,000 & & & \\ \hline Retained earnings & & 438,000 & 418,000 & & & \\ \hline Total liabilities and stockholders' equity & $ & 1,305,000 & 890,500 & & & \\ \hline \end{tabular}

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