Interim Purchase, Full-Year Reporting Alternative, Equity Method Pillow Company purchased 90% of the common stock of Satin Company on May 1, 2002, for a cash payment of $474,000. December 31, 2002, trial balances for Pillow and Satin were: LO6 Pillow Satin Current Assets $ 390,600 $ 179,200 Treasury Stock at Cost, 500 shares 32,000 Investment in Satin Company 510,000 —J0—
Property and Equipment 1,334,000 562,000 Cost of Goods Sold 1,261,000 584,000 Other Expenses 484,000 242,000 Dividends Declared —0— 60,000 Total $3,979,600 $1,659,200 Accounts and Notes Payable $ 270,240 $ 124,000 Dividends Payable 60,000 Capital Stock, $10 par value 1,000,000 200,000 Other Contributed Capital 364,000 90,000 Retained Earnings 315,360 209,200 Sales 1,940,000 976,000 Equity in Subsidiary Income 90,000 —J—
Total $3,979,600 $1,659,200 Satin Company declared a $60,000 cash dividend on December 20, 2002, payable on January 10, 2003, to stockholders of record on December 31, 2002. Pillow Company recognized the dividend on its declaration date. Any difference between cost and book value relates to subsidiary land, included in property and equipment.
Required:
Prepare a consolidated statements workpaper at December 31, 2002, assuming that revenue and expense accounts of Satin Company for the entire year are included with those of Pillow Company. (Assume the full-year reporting alternative. )