On January 2, 2014, Phillips Company purchased 80% of Sanchez Company and 90% of Thomas Company for $225,000 and $168,000, respectively. Immediately before the acquisitions, the balance sheets of the three companies were as follows:

The note receivable and interest receivable of Sanchez relate to a loan made to Thomas Company on October 1, 2013. Thomas failed to record the accrued interest expense on the note.

Required:
Prepare a consolidated balance sheet work-paper as of January 2, 2014. Any difference between book value and the value implied by the purchase price relates to subsidiary land?

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Phillips $400,000 28,000 Sanchez $43,700 A 000 300 96,000 NS Cash Accounts receivable Note receivable Interest receivable Inventory Equipment Land $ 20,000 120,000 60,000 180,000 $788,000 43,000 30,000 70,000 $183,000 80,000 $294,000 $20,000 Total $28,000 Accounts payable Note payable Common stock Other contributed capital Retained earnings $18,000 10,000 75,000 40,000 40,000 $183,000 120,000 160,000 Total $788,000 $294,000