Exercise 5-7 Workpaper Entries 011 January 1, 2004, Packard Company purchased an 80% interest in Sage Company for $600,000. On this date Sage Company had common stock of $150,000 and retained earnings of $400,000. Sage Company's equipment on the date of Packard Company's purchase had a book value of $400,000 and a fair value of $600,000. All equipment had an estimated useful life of 10 years on January 2, 1999. Required: Prepare the December 31 consolidated financial statements workpaper entries for 2004 and 2005 to allocate and depreciate the difference between cost and book value, recording accumulated depreciation as a separate balance