Storm Inc. acquired 75% of Wolverine Company’s common shares…
Storm Inc. acquired 75% of Wolverine Company’s common shares on December 31, 2025 at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 25% of the book value of Wolverine. On the date of acquisition, Wolverine had common stock of $250,000 and retained earnings of $200,000. On January 1, 2026, Wolverine issued 10-year, 9% bonds with a $1,000,000 par value to Sabretooth Corp. (a nonaffiliate) for $1,142,123. These bonds pay interest on June 30 and December 31. On December 31, 2026, Storm purchased $300,000 par value of the bonds from Sabretooth for $352,743. On July 1, 2028, Storm issued 5-year, 8% bonds with a $40,000 par value to Wolverine, when the market rate was 10%. Interest on this bond issue is payable January 1 and July 1. Both Storm and Wolverine amortize bond discounts and premiums using the effective interest method. Annual income and dividends declared and paid by Wolverine are: Net Income Dividends 2026 $50,000 $30,000 2027 75,000 40,000 2028 100,000 45,000 Note: Be sure that the various investments in stocks and bonds are adequately labeled. Required: Round any dollar amounts to the nearest dollar and any percentages to the nearest thousandth of a percent (i.e. if your percentage output is 12.345678, your rounded percentage is 12.346%). Insert a table (use the formatting guide in the instructions as a guide) in the field below to prepare the worksheet entries needed to prepare the consolidated financial statements as of December 31, 2026. Insert a table (use the formatting guide in the instructions as a guide) in the field below to prepare the worksheet entries needed to prepare the consolidated financial statements as of December 31, 2027. Insert a table (use the formatting guide in the instructions as a guide) in the field below to prepare the worksheet entries needed to prepare the consolidated financial statements as of December 31, 2028. Be sure to specify which part of the question (A or B or C) that your entries relate.