Cost Method Use the following to answer the seven questions below On January 1, 2020, P Company purchased 80% of the outstanding common stock of Company for $1,365,000 cash. Any difference between book value and purchase price is allocated to Goodwill. The company uses the Cost method. The following Trial Balances were extracted from each company's records at December 31, 2020: P Company S Company Debit Credit Debit Credit Cash 44.319.000 2.112,500 Receivables 700,000 200.000 Investment in S 1,365,000 PPE (net) 2.800.000 800.000 Patent 350,000 445.000 Accounts payable 350,000 100,000 Other Liabilities 2.100.000 600.000 Common Stock ($5 par value) 1,050,000 300.000 OCC 2,100,000 600,000 Retained Earnings 1/1/2020 1,400.000 400,000 Dividends Declared 18.000.000 667,500 Sales 240.000.000 8.900.000 Dividends Income 534.000 Cost of Goods Sold 108,000,000 4,005,000 Operating Expenses 72.000.000 2,670,000 Total 247,534,000 247,534,000 10,900,000 10,900,000 The difference between the implied value and the book value at the acquisition date * was: $406,250 $65,000 $1,300,000 It is impossible to know The eliminating entries required to prepare the consolidated financial statements on December 31, 2020 would include: * O A debit to Dividends Income by $534,000 O A credit to Dividend Declared by $667,500 A debit to Investment in S by $1,365,000 None of the above P Company's net income for year 2020 from independent operations was: * $60,534,000 $132,534,000 $2,225,000 None of the above The share of the non-controlling interest from the net income of S company during 2020 since acquisition was: * 20% of P Company's Net Income $1,780,000 $445,000 None of the above The consolidated Retained earnings on December 31, 2020 was: * 45,491,500 $45,180,000 $45,580,000 O None of the above The non-controlling interest had a value of $ -- in the consolidated balance sheet on December 31, 2020: * $29,750 O $341,250 $652,750 None of the above In the entry prepared to establish reciprocity on December 31, 2021: * Investment in S should be debited by $1,957,500 and Retained Earnings should be credited by $1,957,500 Investment in S should be debited by $1,557,000 and Retained Earnings should be credited by $1,557,000 Investment in S should be debited by $1,557,500 and Retained Earnings should be credited by $1,557,500 No need for a reciprocity entry when using the cost method