Balance sheets for P Company and 5 Company on August 1, 2014, are as follows: Cash Receivable Inventory Investment in bonds Investment in S Company stock Plant and equipment (net) Land Total P Company $ 174,100 391,500 240,900 282,100 605,000 604,300 201,100 $2,499,000 s Company $98,700 133,600 117,400 -0- -0- 330,300 286,200 $966,200 $58,800 Accounts payable Accrued expenses Bonds payable, 8% Common stock Other contributed capital Retained earnings Total $158,700 31,600 -0- 1,452,600 236,700 619,400 $2,499,000 23,700 191,500 503,100 57,800 131,300 $966,200 Prepare a workpaper for a consolidated balance sheet for P Company and its subsidiary on August 1, 2014, taking into consideration the following: 1. P Company acquired 90% of the outstanding common stock of 5 Company on August 1, 2014, for a cash payment of $605,000. 2. Included in the Investment in Bonds account are $37,700 par value of 5 Company bonds payable that were purchased at par by P Company in 2002. The bonds pay interest on April 30 and October 31. S Company has appropriately accrued interest expense on August 1, 2014; P Company, however, inadvertently failed to accrue interest income on the S Company bonds. 3. Included in P Company receivables is a $34,500 cash advance to s Company that was mailed on August 1, 2014. s Company had not yet received the advance at the time of the preparation of its August 1, 2014. Assume that any excess of book value over the value implied by purchase price is due to overvalued plant and equipment. 4. P COMPANY AND SUBSIDIARY Consolidated Balance Sheet Workpaper August 1, 2014 P S Eliminations Company Company Dr. Cr. Noncontrolling Interest Consolidated Balance Cash 174,100 98,700 $ Receivables 391,500 133,600 Inventory 240,900 117,400 Investment in Bonds 282,100 Investment in s Company Stock 605,000 Difference between Implied and Book Value Plant and Equipment (net) 604,300 330,300 Land 201,100 286,200 Total Assets 2,499,000 966,200 Accounts Payable 158,700 58,800 Accrued Exp ses 31,600 23,700 Bonds Payable, 8% 191,500 Common Stock: P Company 1,452,600 503,100 s Company Other Contributed Capital: P Company 236,700 s Company 57,800 Retained Earnings P Company 619,400 s Company 131,300 Noncontrolling Interest Total 2,499,000 966,200 Advances from P Company Total Liabilities and Equity $ Balance sheets for P Company and 5 Company on August 1, 2014, are as follows: Cash Receivable Inventory Investment in bonds Investment in S Company stock Plant and equipment (net) Land Total P Company $ 174,100 391,500 240,900 282,100 605,000 604,300 201,100 $2,499,000 s Company $98,700 133,600 117,400 -0- -0- 330,300 286,200 $966,200 $58,800 Accounts payable Accrued expenses Bonds payable, 8% Common stock Other contributed capital Retained earnings Total $158,700 31,600 -0- 1,452,600 236,700 619,400 $2,499,000 23,700 191,500 503,100 57,800 131,300 $966,200 Prepare a workpaper for a consolidated balance sheet for P Company and its subsidiary on August 1, 2014, taking into consideration the following: 1. P Company acquired 90% of the outstanding common stock of 5 Company on August 1, 2014, for a cash payment of $605,000. 2. Included in the Investment in Bonds account are $37,700 par value of 5 Company bonds payable that were purchased at par by P Company in 2002. The bonds pay interest on April 30 and October 31. S Company has appropriately accrued interest expense on August 1, 2014; P Company, however, inadvertently failed to accrue interest income on the S Company bonds. 3. Included in P Company receivables is a $34,500 cash advance to s Company that was mailed on August 1, 2014. s Company had not yet received the advance at the time of the preparation of its August 1, 2014. Assume that any excess of book value over the value implied by purchase price is due to overvalued plant and equipment. 4. P COMPANY AND SUBSIDIARY Consolidated Balance Sheet Workpaper August 1, 2014 P S Eliminations Company Company Dr. Cr. Noncontrolling Interest Consolidated Balance Cash 174,100 98,700 $ Receivables 391,500 133,600 Inventory 240,900 117,400 Investment in Bonds 282,100 Investment in s Company Stock 605,000 Difference between Implied and Book Value Plant and Equipment (net) 604,300 330,300 Land 201,100 286,200 Total Assets 2,499,000 966,200 Accounts Payable 158,700 58,800 Accrued Exp ses 31,600 23,700 Bonds Payable, 8% 191,500 Common Stock: P Company 1,452,600 503,100 s Company Other Contributed Capital: P Company 236,700 s Company 57,800 Retained Earnings P Company 619,400 s Company 131,300 Noncontrolling Interest Total 2,499,000 966,200 Advances from P Company Total Liabilities and Equity $