PROBLEM 7-4 Workpaper-Cost Method LO 6 LO 9 Prout Company owns 80% of the common stock of Sexton Company. The stock was purchased for $1,600,000 on January 1, 2017, when Sexton Company's retained earnings were $800,000. On January 1, 2019, Prout Company sold fixed assets to Sexton Company for $360,000. These assets were originally purchased by Prout Company for $400,000 on January 1, 2009, at which time their estimated depreciable life was 25 years. The straight-line method of depreciation is used. On December 31, 2020, the trial balances of the two companies were as shown here: Prout Sexton Company Company Current $ 568,000 $ 271,000 Assets Fixed Assets 1,972,000 830,000 Other Assets 1,000,800 1,600,000 Investment 1,600,000 in Sexton Company Dividends 120,000 100,000 Declared Cost of Goods Sold 942,000 795,000 Other 145,000 90,000 Expenses (including depreciation) Income Tax 187,200 Expense 90,000 Total $6,535,000 $3,776,000 Liabilities $ 305,000 $ 136,000 Accumulated 375,000 290,000 Depreciation Sales 1,475,000 1,110,000 Dividend 80,000 Income 3,000,000 1,200,000 Common Stock Retained Earnings 1/1 Total 1,300,000 1,040,000 $6,535,000 $3,776,000 PROBLEM 7-5 Trial Balance Workpaper-Cost Method LO 6 LO 9 Using the information presented in Problem 7-4, prepare a consolidated financial statements workpaper for the year ended December 31, 2020, using the trial balance format