Parent and Two Subsidiaries, Intercompany Notes On January 2, 2004, Phillips Company purchased 80% of Sanchez Company and 90% of Thomas Company for $225,000 and $168,000, respectively. Immediately before the acquisitions, the balance sheets of the three companies were as follows: LO7 Phillips Sanchez Thomas Cash $400,000 $ 43,700 $ 20,000 Accounts Receivable 28,000 24,000 20,000 Note Receivable —J0— 10,000 —0—
Interest Receivable atl 300 —J—
Inventory 120,000 96,000 43,000 Equipment 60,000 40,000 30,000 Land 180,000 80,000 70,000 Total $788,000 $294,000 $183,000 Accounts Payable $ 28,000 $ 20,000 $ 18,000 Note Payable —0— —0— 10,000 Common Stock 300,000 120,000 75,000 Other Contributed Capital 300,000 90,000 40,000 Retained Earnings 160,000 64,000 40,000 Total $788,000 $294,000 $183,000 The note receivable and interest receivable of Sanchez relate to a loan made to Thomas Company on October 1, 2003. Thomas failed to record the accrued interest expense on the note.
Required: .
Prepare a consolidated balance sheet workpaper as of January 2, 2004. Any difference between cost and book value relates to subsidiary land.