PROBLEM 5-7 Workpaper Entries and Sale of Equipment in Year Three, Complete Equity LO 6 LO9 On January 1, 2019, Pueblo Corporation purchased a 75% interest in Sanchez Company for $900,000. A summary of Sanchez Company's balance sheet at date of purchase follows: Book Value Fair Value Equipment Accumulated depreciation Equipment (net) Other assets $660.000 450.000 $720.000 (240,000) 480,000 450.000 $930,000 $255,000 300,000 375.000 $930.000 $255,000 Liabilities Common stock Retained earnings The equipment had an original life of 15 years and remaining useful life of 10 years. During 2019 Pueblo Corporation reported income of $237,000 and paid dividends of $150,000. Sanchez Company reported net income of $123,000 and paid dividends of $120,000. Pueblo uses the complete equity method to account for its investment in Sanchez Required: A. Prepare the elimination entries for the consolidated financial statements workpaper on December 31, 2019. Accumulated depreciation is presented on a separate row in the workpaper and in the consolidated financial statements. B. Assume that Sanchez Company disposed of all its equipment on January 1, 2021, for $450,000. 1. What amount of gain (loss) will Sanchez Company report? 2. What is the consolidated gain (loss)