In-Transit Items On July 31, 2004, Ping Company purchased 90% of Santos Company’s common stock for $2,010,000 cash. Immediately after the acquisition, the two companies’ balance sheets were as follows: LO7 Ping Santos Cash $ 320,000 $ 150,000 Accounts Receivable 600,000 300,000 Note Receivable 100,000 —0—
Inventory 1,840,000 400,000 Advance to Santos Company 60,000 —0—
Investment in Santos Company 2,010,000 —0—
Plant and Equipment (net) 3,000,000 1,500,000 Land 90,000 90,000 Total $8,020,000 $2,440,000 Accounts Payable $ 800,000 $ 140,000 Notes Payable 900,000 100,000 Common Stock 2,400,000 900,000 Other Contributed Capital 2,200,000 680,000 Retained Earnings 1,720,000 620,000 Total $8,020,000 $2,440,000 Santos Company has not yet recorded the $60,000 cash advance from Ping Company. Ping Company’s accounts receivable include $20,000 due from Santos Company. Santos Company’s $100,000 note payable is payable to Ping Company. Neither company has recorded $7,000 of interest accrued on the note from January 1 to July 31. Any difference between cost and book value relates to land.

Required:
Prepare a consolidated balance sheet workpaper on July 31, 2004.