The Pizza Company acquired 90% of the outstanding voting common stock of the Salsa Company on June 30, 2017. The Pizza Company had effective control over the Salsa Company, however, the Pizza Company uses the Cost Method to account for its Investment in the Salsa Company. The purchase price was $426,000 and on the acquisition date the Salsa Company had Capital Stock of $300,000, Additional Paid in Capital of $50,000 and Retained Earnings of $60,000. On the acquisition date, the fair value of Salsa Companys building was in excess of its cost value and therefore, the entire excess of implied cost over the fair value of the recorded net assets was attributed to the building. As of the acquisition date, the building had an estimated useful life of 5 years, and the straight-line method for depreciation is used. Between the date of acquisition, June 30, 2017 and December 31, 2019, the two companies had the following intercompany transactions:

1. On December 31, 2017, Pizza Company sold equipment (with an original cost of $100,000 and accumulated depreciation of $50,000) to Salsa Company for $97,500. This equipment has since been depreciated at an annual rate of 20% of the purchase price. .

2. During 2018, Salsa Company sold land to Pizza Company at a profit of $15,000.

3. During 2018, the Salsa Company sold $17,500 of inventory to the Pizza Company. As of December 31, 2018, the remaining inventory from this intercompany sale had a profit of $7,500.

4. During 2019, Salsa Company sold inventory to the Pizza Company for $375,000, of which $60,000 was unpaid on December 31, 2019. The December 31, 2019, inventory of Pizza Company included goods acquired from Salsa Company on which Salsa Company recognized a profit of $10,500.

Required: 1. Using the Excel workpaper provided, complete a consolidated financial statements workpaper for the year ended December 31, 2019. Pizza Company and Subsidiary Consolidated Statements Workpaper For the year ended December 31, 2019 Eliminations Noncontrolling Consolidating Pizza Company Salsa Company Debit Credit Interests Balances Sales $2,555,500 $1,120,000 Dividend Income 54,000 Total Revenue 2,609,500 1,120,000 Cost of Goods Sold 1,730,000 690,500 Expenses: Rent Expense 145,000 69,000 Salary Expense 320,000 112,500 Utilities Expense 34,600 12,600 Professional Expenses 65,255 27,050 Depreciation Exp. 60,000 Telephone Expense 29,645 29,850 Total Expenses 654,500 251,000 Total Cost and Expense 2,384,500 941,500 Net Income $225,000 $178,500 1/1 Retained Earnings 595,000 139,500 Net Income 225,000 178,500 Dividends Declared (100,000) (60,000) 12/31 Retained Earnings $720,000 $ 258,000 Cash 119,500 132,500 Accounts Receivable 342,000 125,000 Inventory 362,000 201,000 Other Current Assets 40,500 13,000 Land 150,000 Investment in Shea Company 426,000 Property and Equipment 825,000 241,000 Accumulated Depreciation (207,000) (53,500) Total Assets $2,058,000 $659,000 Accounts Payable 295,000 32,000 Other Liabilities 43,000 19,000 Capital Stock 1,000,000 300,000 Additional Paidin Capital 50,000 Retained Earnings 720,000 258,000 Total Liabilities and Equity $2,058,000 $659,000