Pappy, Inc. acquired a 60 percent interest in the common stock of Sammy, for $372,000 on January 1, 2015. Sammys book value on that date consisted of common stock of $100,000 and retained earnings of $220,000. Sammy held patents (10-year remaining life) that were undervalued within the company's accounting records by $70,000 and an unrecorded customer list (15-year remaining life) assessed at a $45,000 fair value. Any remaining excess acquisition-date fair value was assigned to goodwill. Pappy uses the equity method. At year end, Sammy owed Pappy $20,000.

In the course of ordinary business, Pappy sells inventory to Sammy. In 2015, Pappy sold $150,000 to Sammy. This inventory had an original cost of $120,000. At December 31, 2015, the ending balance (at the transfer price) in Sammys ending inventory was $50,000. In 2016, Pappy sold $160,000 to Sammy. This inventory cost Pappy $112,000 and $40,000 at the transfer price remained unsold at the end of 2016.

In addition, during 2016, Pappy sold land to Sammy for $100,000 with an original cost of $80,000.

The individual financial statements for these two companies as of December 31, 2016, and the year then ended follow:

	PAPPY		SAMMY
Sales	$ 700,000		$ 335,000
Cost of goods sold	(460,000)		(205,000)
Gain on sale of land	20,000		-
Operating expenses	(208,000)		(70,000)
Income from Sammy	28,000		-
Net income	$ 80,000		$ 60,000
Retained earnings, 1/1	$ 695,000		$ 280,000
Net income (above)	80,000		60,000
Dividends declared	(45,000)		(15,000)
Retained earnings, 12/31	$ 730,000		$ 325,000
Cash and receivables	$ 248,000		$ 148,000
Inventory	233,000		129,000
Investment in Sammy	411,000		-
Land	-		100,000
Buildings (net)	308,000		102,000
Equipment (net)	220,000		86,000
Patents (net)	-		20,000
Total assets	$ 1,420,000		$ 585,000
Liabilities	$ 390,000		$ 160,000
Common stock	300,000		100,000
Retained earnings, 12/31	730,000		325,000
Total liabilities and equities	$ 1,420,000		$ 585,000

Required: Prepare the elimination entries and consolidation worksheet