On January 1, Year 1, Plano Co Required:
Prepare the Appropriate Elimination and Reclassification Entries Necessary to of Santa

On January 1, Year 1, Plano Co.purchased for $180,000, 90% of Santa Fe Co.at a time when Santa Fe had a book value of $200,000.There were no intercompany transactions during year 4.
$\begin{array}{lll}\text { As of December } 31 \text {, Year } 4\\\text { Assets }&\text { Plano }&\text { Santa } F e\\\text { Accounts receivable } & \$ 50,000 & \$ 40,000 \\\text { Investment in Santa Fe (equity) } & 270,000 & - \\\text { Other assets } & {1,680,000}& \underline{710,000} \\\text { Total assets } &{\$ 2,000,000} & \$ 750,000\\\\\text { Liabilities and Equity }\\\text { Accounts payable } & \$ 40,000 & \$ 50,000 \\\text { Other liabilities } & 1,360,000 & 400,000 \\\text { Common stock } & 200,000 & 200,000 \\\text { Retained earnings } & \$ 400,000 & 100,000 \\\text { Total liabilities and equity } & \$ 2.000,000 & \$ 750,000\\\\\text { CONDENSED INCOME STATEMENT }\\\text { for Current Year }\\&\text { Plano }&\text { Santa } F e\\\text { Sales } & \$ 800,000 & \$ 200,000 \\\text { Equity in earnings of Santa Fe } & 18,000 &- \\\text { Total revenues } & \$ 818,000 & \$ 200,000\\\text { Cost of goods sold } & \overline{500,000} & \overline{\$ 120,000} \\\text { Depreciation } & 100,000 & 30,000 \\\text { Other expenses } & 78,000 & 20,000 \\\text { Tax expense } & 40,000 & 10,000\\\text { Total expenses }&\$718,000&\$180,000\\\text { Net income }&\$100,000&\$20,000\end{array}$ Required:
Prepare the appropriate elimination and reclassification entries necessary to prepare a consolidated balance sheet and income statement.