On January 1, 2019, Sanchez Corp. issued shares of its common stock to acquire all of the outstanding common stock of Roland Inc. Roland's book value was only $140,000 at the time, but Sanchez issued 12,000 shares having a par value of $1 per share and a fair value of $20 per share. Sanchez was willing to convey these shares because it felt that buildings (ten-year life) were undervalued on Roland's records by $60,000 while equipment (five-year life) was undervalued by $25,000. Any consideration transferred over fair value of identified net assets acquired is assigned to goodwill. Following are the individual financial records for these two companies for the year ended December 31, 2022. Sanchez Roland Corp. Inc. $ 372,000 | $ 108,000 Revenues Expenses (264,000) (72,000) Equity in subsidiary earnings 25,000 0 Net income $ 133,000 $ 36,000 Retained earnings, January 1, 2022 $ 765,000||$102,000 Net income (above) 133,000 36,000 Dividends paid (84,000) (24,000 Retained earnings, December 31, 2022 $ 814,000 $114,000 Current assets $ 150,000||$ 22,000 Investment in Spaulding Inc. 242,000 LEI 0 Buildings (net) 525,000||| 85,000 Equipment (net) 389,250 | 129,000 Total assets $1,306,250||$236,000 Liabilities $ 82,250[1$ 50,000 Common stock 360,000 72,000 Additional paid-in capital 50,000 0 Retained earnings, December 31, 2022 (above) 814,000 | 114,000 Total liabilities and stockholders' equity ,306,250 $236,000 Required: Prepare consolidation entries for this business combination. For all consolidation entries, label them as S, A, I, D, or E. Do not prepare the worksheet. On January 1, 2019, Sanchez Corp. issued shares of its common stock to acquire all of the outstanding common stock of Roland Inc. Roland's book value was only $140,000 at the time, but Sanchez issued 12,000 shares having a par value of $1 per share and a fair value of $20 per share. Sanchez was willing to convey these shares because it felt that buildings (ten-year life) were undervalued on Roland's records by $60,000 while equipment (five-year life) was undervalued by $25,000. Any consideration transferred over fair value of identified net assets acquired is assigned to goodwill. Following are the individual financial records for these two companies for the year ended December 31, 2022. Sanchez Roland Corp. Inc. $ 372,000 | $ 108,000 Revenues Expenses (264,000) (72,000) Equity in subsidiary earnings 25,000 0 Net income $ 133,000 $ 36,000 Retained earnings, January 1, 2022 $ 765,000||$102,000 Net income (above) 133,000 36,000 Dividends paid (84,000) (24,000 Retained earnings, December 31, 2022 $ 814,000 $114,000 Current assets $ 150,000||$ 22,000 Investment in Spaulding Inc. 242,000 LEI 0 Buildings (net) 525,000||| 85,000 Equipment (net) 389,250 | 129,000 Total assets $1,306,250||$236,000 Liabilities $ 82,250[1$ 50,000 Common stock 360,000 72,000 Additional paid-in capital 50,000 0 Retained earnings, December 31, 2022 (above) 814,000 | 114,000 Total liabilities and stockholders' equity ,306,250 $236,000 Required: Prepare consolidation entries for this business combination. For all consolidation entries, label them as S, A, I, D, or E. Do not prepare the worksheet
