On 1/1/2014, P Company acquires 100% of the voting stock of S, Inc. for $18,000,000 in cash.Some of S assets had fair values that differed from their book values, as follows:

BOOKVALUEFAIR VALUE

Property & Equipment, net (20 remaining life, SL)$11,000,000$3,000,000

Identifiable intangible assets (5 years,SL)$000$10,000,000

S total stockholders' equity at 1/1/2014 was $5,000,000.Now we are at 12/31/2017, four years later.S's retained earnings, January 1, 2017 reflect the accumulation of net income less dividends.S does not report any AOCI.Cumulative goodwill impairment to the beginning of 2017 is $1,000,000.Additional goodwill impairment of $500,000 was incurred in 2017. P uses the complete equity method to record its investment in S.The trial balance at 12/31/2017 for S appears below.

S,IncDebit (Credit)Current assets$3,500,000Property & equipment28,000,000Current liabilities(1,500,000)Noncurrentliabilities(9,000,000)Common stock and additional paid-in capital(2,000,000)Retained earnings,1/1/17(16,500,000)Sales revenues(14,500,000)COGS8,500,000Operating expenses3,500,000

1) On the 2017 consolidation work paper, eliminating entry (R) reduces Investment in S by

a.$13,000,000

b.$8,400,000

c.$7,200,000

d.$5,100,000

2)Goodwill on P's books as of 12/31/17 is

a.$9,500,000

b.Zero

c.$1,500,000

d.$13,000,000

3)On the 2017 consolidation work paper, eliminating entry (E) reduces Investment in S by

a.$18,900,000

b.$16,500,000

c.$18,500,000

d.$5,000,000

4)On the 2017 consolidation work paper, eliminating entry (O) increases consolidated operating expenses by

$2,500,000

$2,100,000

$2,900,000

There is none

5)What is the 2017 equity in net income of S, reported on P's books using the complete equity method?

a.$900,000

b.$2,500,000

c.$400,000

d.None

6)On P's December 31, 2017 trial balance, what is the balance of its investment in S account, using the complete equity method?

a.$26,100,000

b.$25,700,000

c.$26,600,000

d.$31,600,000