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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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