On January 2, 2019, Phillips Company purchased 80% of Sanchez Company and 90% of Thomas Company for $225,000 and $168,000, respectively. Immediately before the acquisitions,
On January 2, 2019, 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:
Phillips | Sanchez | Thomas | |
Cash | 400,000 | 43,700 | 20,000 |
Accounts receivable | 28,000 | 24,000 | 20,000 |
Note Receivable | 0 | 10,000 | 0 |
Interest Receivable | 0 | 300 | 0 |
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 |
Account 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, 2018. Thomas failed to record the accrued interest expense on the note.
Required:
Prepare a consolidated balance sheet workpaper as of January 2, 2019. Any difference between book value and the value implied by the purchase price relates to subsidiary land.
*do not use your own hand writing*
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