Prout Company owns 82% of the common stock of Sexton Company. The stock was purchased for $1,620,000 on January 1, 2017, when Sexton Company's retained earnings were $800,000. On January 1, 2019, Prout Company sold fixed assets to Sexton Company for $370,000. These assets were originally purchased by Prout Company for $400,000 on January 1, 2009, at which time their estimated depreciable life was 25 years. The straight‐line method of depreciation is used.

On December 31, 2020, the trial balances of the two companies were as shown here:

	Prout Company	Sexton Company
Current Assets	$  568,000	$  271,000
Fixed Assets	1,972,000	830,000
Other Assets	1,000,800	1,600,000
Investment in Sexton Company	1,600,000
Dividends Declared	120,000	100,000
Cost of Goods Sold	942,000	795,000
Other Expenses (including depreciation)	145,000	90,000
Income Tax Expense	187,200	90,000
Total	$6,535,000	$3,776,000
Liabilities	$  305,000	$  136,000
Accumulated Depreciation	375,000	290,000
Sales	1,475,000	1,110,000
Dividend Income	80,000
Common Stock	3,000,000	1,200,000
Retained Earnings 1/1	1,300,000	1,040,000
Total	$6,535,000	$3,776,000

Required:

1. Prepare a consolidated statements workpaper for the year ended December 31, 2020.
2. Assuming that on January 1, 2021, Sexton Company sells the fixed assets purchased from Prout Company to a party outside the affiliated group for $300,000:
   1. Prepare the entry that would have been entered on the books of Sexton Company to record the sale.
   2. Prepare entries for the December 31, 2021, consolidated statements workpaper necessitated by the sale of the assets.
   3. Prepare any workpaper entries that will be needed in the December 31, 2022, consolidated statements workpaper in regard to these fixed assets.