Washington Company purchased 100% of Jefferson Company on January 1, 20X1 for $1,000,000 when the book value of Jefferson was$750,000 with the excess caused by Equipment that was undervalued by $50,000 and Goodwill. The Equipment had a four year life. In20x2 Washington sold inventory to Jefferson still in the inventory of Jefferson at year end with a profit of $3,000.During 20X3,Washington sold to Jefferson inventory costing $30,000 for$40,000.At December 31, 20x3, Jefferson still had $6,000 cost to Jefferson of that inventory in its inventory .Jefferson reported$50,000 of income in 20X3 and paid dividends of $10,000.

C. Complete the consolidation worksheet below using the information from above and assuming the beginning of year 3Investment in J account has a balance of 1,152,000:

The income statements and balance sheets for the two companies for 20X3 are shown below:
		Washington	Jefferson	Dr.	Cr	Consolidated
Sales		300,000	100,000
Cost of Goods Sold		60,000	40,000
		240,000	60,000
Expenses		40,000	10,000
Income from S		_______	_______
Total Income			50,000
Begin. RE		800,000	730,000
Dividends		20,000	10,000
End. RE			770,000
Cash		100,000	100,000
Receivables		70,000	100,000
Inventory		50,000	50,000
Property/Equipment		500,000	900,000
Accumulated Dep		-100,000	-100,000
Patents		0	50,000
Goodwill
Investment in J		_______	________
			1,100,000
Liabilities		282,000	130,000
Capital Stock		500,000	200,000
Retained Earnings		_______	770,000
			1,100,000