On January 2, 2014, Phillips Company purchased 80% of Sanchez Company and 90% of Thomas Company for $221,700 and $167,300, respectively. Immediately before the acquisitions, the balance sheets of the three companies were as follows:
| Phillips | Sanchez | Thomas | |
| Cash | 400000 | 43700 | 20000 |
| Accounts Receivable | 28000 | 24000 | 20000 |
| Note Receivable | 0 | 10000 | 0 |
| Interest Receivable | 0 | 300 | 0 |
| Inventory | 120000 | 96000 | 43000 |
| Equipment | 60000 | 40000 | 30000 |
| Land | 180000 | 80000 | 70000 |
| Total | 788000 | 294000 | 183000 |
| Accounts Payable | 28000 | 20000 | 18000 |
| Note Payable | 0 | 0 | 10000 |
| Common Stock | 300000 | 120000 | 75000 |
| Other Contributed capital | 300000 | 90000 | 40000 |
| Retained earnings | 160000 | 64000 | 40000 |
| Total | 788000 | 294000 | 183000 |
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.
