P3-6 Consolidation after acquisition Harrison PLC acquires 80 percent of David PLC for $2,080,000 on January 1,

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P3-6 Consolidation after acquisition Harrison PLC acquires 80 percent of David PLC for $2,080,000 on January 1, 2014. The book values of David PLC’s assets and liabilities are equal to the fair values. David PLC reports net income of $500,000 during the year. Dividends of $200,000 are declared by David PLC on December 20. These dividends are to be paid next year. The balance sheets of Harrison PLC and David PLC at December 31, 2014 are as follows (in thousands):

Harrison PLC David PLC Cash $300 80 Accounts receivable 400 200 Dividends receivable 160 —
Equipment—net 1,000 800 Building—net 2,000 1,000 Land 1,600 1,400 Investment in David PLC 2,320 Accounts payable 500 80 Dividends payable 100 200 Notes payable 1,000 400 Capital stock 2,000 1,000 Retained earnings 4,180 1,800 Harrison PLC accounts payable includes $100,000 owed to David PLC.
R E Q u I R E D : Prepare consolidated balance sheet workpapers for Harrison PLC and Subsidiary at December 31, 2014.

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