Illustration #2 Stock Acquisition (Ch. 2} Pepper Company, which is a calendar-yearreporting company, purchased 100% of the common stock of Salt Inc. for $325,000 on 12I31I15. Pepper declared dividends of $80,000 and Salt declared dividends of$10,000 during 2015. Each company's nancial statements for the year ended 12I31I15 immediately after the acquisition are as follows: Income Statement {2015] Pepper Co. Salt Co. Sales (900,000) {500,000} Cost of sales 500,000 250,000 Expenses 200,000 202,000 Net Income (140,000) (48,000} Balance Sheet {as of 12I31I15} Cash 45,000 20,000 Accounts receivable 75,000 ?0,000 Inventory 105,000 80,000 Investment in Salt 325,000 Land 100,000 ?0,000 Buildings and equipment 250,000 220,000 Accumulated depreciation (150,000) (00,000} Total Assets 750,000 400,000 Pavables and accruals (80,000) (60,000} Bonds payable (20,000) {150,000} Common stock (300,000) {100,000} Retained earnings (350,000) {00,000} Total Liabilities and Equity (750,000) (400,000) Required: a. Prepare a consolidation worksheet on the acquisition date of 12I31I15 assuming that the book values of Salt's net assets approximated fair value on the acquisition date