On December 31, 200X P Corporation paid $300,000 cash for 80% of the
common stock of S Company which becomes a subsidiary. Following
information is shown prior to the acquisition being recorded:
P Company
Assets			Liabilities and Equity
Cash	580,000		Liabilities	90,000
Inventories	60,000
Plant	340,000		Common Stock, $5pv	100,000
			Paid in Capital	200,000
			Retained Earnings	590,000
Total	980,000		Total	980,000
S Company
Assets			Liabilities and Equity
Inventories	20,000		Liabilities	30,000
Other assets	40,000		Long Term Debt	50,000
Plant	140,000		Common Stock, $10pv	40,000
			Paid in Capital	20,000
			Retained Earnings	60,000
Total	200,000		Total	200,000
S market values are:
	Plant		$250,000
	Inventory		$50,000
1. Prepare the entries in journal format to record the acquisition
and post to the general edger accounts.
2. Prepare a consolidation workpaper.
3. Prepare consolidated balance sheet.