9-32 PM Tue Oct 9 71% Advanced Accounting 6e 6th Edition by Debra C. Jeter PROBLEMS PROBLEM3-1 Consolidated Workpaper: Two Cases L08 LO9 The two following separate cases show the financial position of a parent company and its subsidiary company on November 30, 2014, just after the parent had purchased 90% of the subsidiary's stock: Case I Case Il P Company S 880,000 190,000 1,400,000 S Company Current assets Investment in S Company Long-term assets Other assets 90,000 P Company S 780,000 190,000 1,200,000 70,000 S Company $280,000 400,000 40,000400,000 $700,000 Total $2,240,000 $750,000 Current liabilities Long-term liabilities Common stock Retained earnings $270,000 640.000 20,000 600,000 290,000 180,000 S 700,000 920,000 600,000 20,000 270,000 180,000 40,000 $750,000 470,000 (40,000) Total $2,560,000 $700,00 $2.240,000 Required: A. Prepare a November 30, 2014, consolidated balance sheet workpaper for each of the foregoing cases. In Case I, any difference between book value of equity and the value implied by the purchase price relates to subsidiary long-term assets. In Case II, assume that any excess of book value over the value implied by pur- chase price is due to overvalued long-term assets. B. Assume that Company S's balance sheet is the same as the balance sheet used in Case I (from part A). Sup- pose that there were 50,000 shares of S Company common stock outstanding and that Company P acquired 125 of 863