11-43 Consolidated Financial Statements (Horngren 9^th edition)

Company P acquired a 100% voting interest in Company S for $120 million cash at the start of the year. Immediately before the business combination, each company has the following condensed balance sheet accounts ($ in millions):

	P		S
Cash and other assets	$ 500		$160
Accounts payable, etc.	$ 200		$ 40
Stockholders equity	300		120
Total liab. and stk.eq.	$ 500		$160

Prepare a tabulation of the consolidated balance sheet accounts immediately after acquisition. Use the balance sheet equation format.

Suppose P and S have the following results for the year:

	P	S
Sales	$600	$180
Expenses	450	170

Prepare income statements for the year for P, S, and the consolidated entity. Assume neither P Nor S sold items to the other.