Balance sheets for P Company and S Company on August 1, 2014, are as follows: P Company S Company $ 174,900 $104,300 Cash Receivable Inventory Investment in bonds. Investment in S Company stock Plant and equipment (net) Land Total Accounts payable Accrued expenses Bonds payable, 8% 3. 4. 367,700 271,200 298,700 589,000 630,300 217,000 $2,548,800 $163,900 29,600 -0- 1,597,000 246,200 512,100 $2,548,800 128,600 115,700 -0- -0- 319,300 273,200 $941,100 Common stock Other contributed capital Retained earnings Total 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. 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. Assume that any excess of book value over the value implied by purchase price is due to overvalued plant and equipment. $57,100 23,600 186,600 438,900 59,100 175,800 $941,100 Cash Receivables Inventory Investment in Bonds Investment in S Company Stock Difference between Implied and Book Value Plant and Equipment (net) Land Total Assets 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 Noncontrolling Interest. Total Advances from P Company Total Liabilities and Equity P Company 174,900 367,700 128,600 271,200 115,700 298,700 589,000 630,300 217,000 2,548,800 163,900 29,600 1,597,000 246,200 512,100 S Company 104,300 2,548,800 319,300 273,200 941,100 57,100 23,600 186,600 438,900 59,100 175,800 941,100 P COMPANY AND SUBSIDIARY Consolidated Balance Sheet Workpaper August 1, 2014 Eliminations Dr. Cr. Noncontrolling Interest $ Consolidated Balance Balance sheets for P Company and S Company on August 1, 2014, are as follows: P Company S Company $ 174,900 $104,300 Cash Receivable Inventory Investment in bonds. Investment in S Company stock Plant and equipment (net) Land Total Accounts payable Accrued expenses Bonds payable, 8% 3. 4. 367,700 271,200 298,700 589,000 630,300 217,000 $2,548,800 $163,900 29,600 -0- 1,597,000 246,200 512,100 $2,548,800 128,600 115,700 -0- -0- 319,300 273,200 $941,100 Common stock Other contributed capital Retained earnings Total 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. 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. Assume that any excess of book value over the value implied by purchase price is due to overvalued plant and equipment. $57,100 23,600 186,600 438,900 59,100 175,800 $941,100 Cash Receivables Inventory Investment in Bonds Investment in S Company Stock Difference between Implied and Book Value Plant and Equipment (net) Land Total Assets 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 Noncontrolling Interest. Total Advances from P Company Total Liabilities and Equity P Company 174,900 367,700 128,600 271,200 115,700 298,700 589,000 630,300 217,000 2,548,800 163,900 29,600 1,597,000 246,200 512,100 S Company 104,300 2,548,800 319,300 273,200 941,100 57,100 23,600 186,600 438,900 59,100 175,800 941,100 P COMPANY AND SUBSIDIARY Consolidated Balance Sheet Workpaper August 1, 2014 Eliminations Dr. Cr. Noncontrolling Interest $ Consolidated Balance