Phillips Co acquired all of the common stock of Sanchez Co on January 1, 2020 As of that date, Sanchez had the following trial balance Debit Credit Accounts payable $ 40,000 Accounts receivable $ 50,000 Additional paid in capital 80,000 Buildings (net) (15 year life) 120,000 Cash and short term inv...

Phillips Co. acquired all of the common stock of Sanchez Co. on January 1, 2020. As of

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Question:

Phillips Co. acquired all of the common stock of Sanchez Co. on January 1, 2020. As of that date, Sanchez had the following trial balance:

	Debit		Credit
Accounts payable			$	40,000
Accounts receivable	$	50,000
Additional paid-in capital				80,000
Buildings (net) (15-year life)		120,000
Cash and short-term investments		70,000
Common stock				290,000
Equipment (net) (10-year life)		230,000
Intangible assets (indefinite life)		110,000
Land		90,000
Long-term liabilities (mature 12/31/22)				170,000
Retained earnings, 1/1/20				110,000
Supplies		20,000
Totals	$	690,000	$	690,000

Phillips Co. acquired the common stock of Sanchez Co. for $600,000 in cash. Phillips used the equity method of accounting for this investment.

During 2020, Sanchez reported net income of $100,000 while paying dividends of $15,000. As of January 1, 2020, Sanchez's land had a fair value of $105,000, its buildings were valued at $175,000, and its equipment was appraised at $240,000. Any excess of consideration transferred over fair value of assets and liabilities acquired is due to an unamortized patent to be amortized over 10 years.

Required:

Prepare consolidation worksheet entries for December 31, 2020. For all consolidation entries, label them as S, A, I, D, or E. Do not prepare the worksheet. Show all supporting schedules/calculations.