Balance sheets for P Company and S Company on January 1, 2017, are as follows:

P S

Cash $ 331,000 $ 212,000

Accounts receivable 582,000 252,000

Due from subsidiary 150,000 -

Inventory 522,000 216,000

Notes receivable 612,000 -

Investment in S 1,378,000 -

Plant and equipment (net) 1,146,000 640,000

Land 400,000 600,000

Total Assets $ 5,121,000 $ 1,920,000

Accounts payable $ 348,000 $ 116,000

Accrued expenses 65,000 52,000

Due to parent - 100,000

Notes payable - 300,000

Common stock 3,205,000 920,000

Other contributed capital 520,000 120,000

Retained earnings 983,000 312,000

Total Liabilities and Equities $ 5,121,000 $ 1,920,000

Prepare a workpaper for a consolidated balance sheet for P Company and its subsidiary on January 1, 2017, taking into consideration the following: 1. Pumpkin acquired 90% of the outstanding common stock of S Company on January 1, 2017, for a cash payment of $1,378,000.

2. Unrelated to the acquisition, P Company agreed to pay $150,000 in cash advances to S Company. These cash advances were to be made in three installment payments of $50,000 each. Pumpkin mailed the final $50,000 payment on January 1, 2017. S Company had not yet received this final portion of the advance at the time of the preparation of its January 1, 2017 balance sheet.

3. P Company holds 40,000 of notes receivable from S Company.

4. On the date of acquisition, P's management noted the following fair value measurements of S's accounts: accounts receivable of $300,000, inventory of $240,000, plant and equipment of $600,000, and accrued expenses of $46,000. The remainder S's assets and liabilities had fair values that were equal to their book values.