Pierce Company acquired a 90% interest in Sanders Company on January 1, 2019, for $1,480,000. At this time, Sanders Company?s common stock and retained earnings balances were $1,000,000 and $500,000, respectively. An examination of the books of Sanders on the date of purchase revealed the following:

Sanders Company?s equipment has a remaining life of 10 years. Eighty percent of the inventory was sold in 2019, the remainder in 2020.

During 2019, Pierce Company sold merchandise costing $400,000 to Sanders at a 25% markup on cost, and Sanders sold merchandise to Pierce Company for $100,000 (this price included $25,000 in profit). In 2020, Pierce Company sold merchandise to Sanders Company for $350,000, while Sanders Company sold merchandise to Pierce Company for $80,000. The 2019 markup percentages were also used on the 2020 sales.

The selling price of intercompany merchandise remaining in ending inventories for both years is summarized here:

In 2020, Sanders Company also sold a piece of land that had a book value of $250,000 to Pierce Company for $300,000. On December 31, 2020, Pierce Company holds a $60,000 receivable on the merchandise it sold to Sanders Company.

Adjusted trial balances for the year ended December 31, 2020 are shown here:

Required:

Prepare a consolidated statements workpaper for the year ended December 31, 2020.

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Book Value Fair Value Current Assets Marketable Securities $300,000 200,000 $300,000 Inventory Plant and Equipment (net) Land 175,000 225,000 650,000 500,000 800,000 Merchandise from Intercompany Sales in Ending Inventory of 2019 2020 Pierce Company Sanders Company $40,000 $20,000 50,000 30,000