Balance sheets for P Company and S 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 Companys Company $ 174,900 $104,300 367,700 128,600 271,200 115,700 298,700 -0- 589,000 -0- 630,300 319,300 217,000 273,200 $2,548,800 $941,100 Accounts payable Accrued expenses Bonds payable, 8% Common stock Other contributed capital Retained earnings Total $163,900 29,600 -0- 1,597,000 246,200 512,100 $2,548,800 $57,100 23,600 186,600 438,900 59,100 175,800 $941,100 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 s Company on August 1, 2014, for a cash payment of $589,000. 2. Included in the Investment in Bonds account are $39,400 par value of S 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 $33,100 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. 4. Assume that any excess of book value over the value implied by purchase price is due to overvalued plant and equipment. P COMPANY AND SUBSIDIARY Consolidated Balance Sheet Workpaper August 1, 2014 Eliminations Dr. Noncontrolling Interest Consolidated Balance Cash Receivables P S Company Company 174,900 104,300 367,700 128,600 271,200 115,700 298,700 589,000 Inventory Investment in Bonds Investment in S Company Stock Difference between Implied and Book Value Plant and Equipment (net) 630,300 217,000 2,548,800 319,300 273,200 Land Total Assets 941,100 163,900 29,600 57,100 23,600 186,600 1,597,000 Accounts Payable Accrued Expenses Bonds Payable, 8% Common Stock: P Company s Company Other Contributed Capital: P Company s Company Retained Earnings P Company s Company U UU UU 438,900 246,200 59,100 UU UU UU UUUU44 512,100 175,800 Noncontrolling Interest Total 2,548,800 941,100 Advances from P Company Total Liabilities and Equity Balance sheets for P Company and S 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 Companys Company $ 174,900 $104,300 367,700 128,600 271,200 115,700 298,700 -0- 589,000 -0- 630,300 319,300 217,000 273,200 $2,548,800 $941,100 Accounts payable Accrued expenses Bonds payable, 8% Common stock Other contributed capital Retained earnings Total $163,900 29,600 -0- 1,597,000 246,200 512,100 $2,548,800 $57,100 23,600 186,600 438,900 59,100 175,800 $941,100 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 s Company on August 1, 2014, for a cash payment of $589,000. 2. Included in the Investment in Bonds account are $39,400 par value of S 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 $33,100 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. 4. Assume that any excess of book value over the value implied by purchase price is due to overvalued plant and equipment. P COMPANY AND SUBSIDIARY Consolidated Balance Sheet Workpaper August 1, 2014 Eliminations Dr. Noncontrolling Interest Consolidated Balance Cash Receivables P S Company Company 174,900 104,300 367,700 128,600 271,200 115,700 298,700 589,000 Inventory Investment in Bonds Investment in S Company Stock Difference between Implied and Book Value Plant and Equipment (net) 630,300 217,000 2,548,800 319,300 273,200 Land Total Assets 941,100 163,900 29,600 57,100 23,600 186,600 1,597,000 Accounts Payable Accrued Expenses Bonds Payable, 8% Common Stock: P Company s Company Other Contributed Capital: P Company s Company Retained Earnings P Company s Company U UU UU 438,900 246,200 59,100 UU UU UU UUUU44 512,100 175,800 Noncontrolling Interest Total 2,548,800 941,100 Advances from P Company Total Liabilities and Equity