On January 1, 2009 Company P acquired 80% of the common stock of Company S for $904000. On January 1, 2009 the owner's equity of Company S conisted of common sotck of $600000, paid in capital of $230000, and retained earning of $170000. inventory was undervalued on the books of Comoany S in the amount of $5000. Plant and equipment with 10 year remaining useful life wasundervalued on the books of Comoany S in the amount of $30000. Land was undervalued on the books of Comoany S in the amount of $25000. The Income statement for 2016, the retained earning statement for 2016, the balance sheet on December 31, 2016 for each company are presented below.

The following additional information is available:

3. On January 1, 2013 Company S acquired 40% of the 10% bonds of Company P for $262,000 when th bonds of Company P had a carrying value of $664,000. The bonds mature on January 1, 2022. Both companies use straight-line.

Required: 1. Prepare eliminations entires for the preparation of consolidated financial statemnets on Dec 31, 2016.

stook of On January 1, 2009 Company P acquired 80% of the common Company S for $904, 00o. On January 1, 2009 the owners equity ofE Company S consisted of common stock of $600,000, paid-in capital of $230,o0o, and retained earnings of $170,000. Inventory was on the books of Company s in the amount of $5,000. Plant and equipment with a 10 year ramaining usoful life was undervalued on the oks of Company s in the amount of $30,000. Land was undervalued on the books of company S in the amount of $25,000 he income statement for 2016, the retained earnings statement for 2016, and the balance sheet on December 31, 2016 for each company are presented below Sales Subsidiary Income Interest Income Company P $2,600,000 183,900 Company s $2,000,000 30,000 $2,030,000 $2,783, 900 Expenses Cost of Goods Sold $1,500,000 Operating Depreciation Interest $1,150,000 555,000 75,000 716,000 125,000 74,000 2,415,000 1,780,000 Net Income $1,460,000 250,000 $1,822,300 368,900 $2,191,200 100,000 $2,091,200 Retained Earnings January 1 Net Income $1,710,000 30,000 680,000 Dividends Declared Retained Earnings December 31 Cash Accounts Receivables Inventory Investment in Bonds Investment in S Company $ 136,000 145,000 550,000 $ 220,000 250,000 475,000 270,000 2,048,000 2,016,000 645,000 5,540,000 Plant and Equipment (net) Land 885,000 500,000 Accounts Payable Bonds Payable Discount on Bonds Payable Common Stock Paid-in Capital Retained Earnings $ 268,800 700,000 $ 90,000 (20,000) 2,000,000 500,000 2,091,200 $5,540,000 600,000 230,000 1, 680, 000 stook of On January 1, 2009 Company P acquired 80% of the common Company S for $904, 00o. On January 1, 2009 the owners equity ofE Company S consisted of common stock of $600,000, paid-in capital of $230,o0o, and retained earnings of $170,000. Inventory was on the books of Company s in the amount of $5,000. Plant and equipment with a 10 year ramaining usoful life was undervalued on the oks of Company s in the amount of $30,000. Land was undervalued on the books of company S in the amount of $25,000 he income statement for 2016, the retained earnings statement for 2016, and the balance sheet on December 31, 2016 for each company are presented below Sales Subsidiary Income Interest Income Company P $2,600,000 183,900 Company s $2,000,000 30,000 $2,030,000 $2,783, 900 Expenses Cost of Goods Sold $1,500,000 Operating Depreciation Interest $1,150,000 555,000 75,000 716,000 125,000 74,000 2,415,000 1,780,000 Net Income $1,460,000 250,000 $1,822,300 368,900 $2,191,200 100,000 $2,091,200 Retained Earnings January 1 Net Income $1,710,000 30,000 680,000 Dividends Declared Retained Earnings December 31 Cash Accounts Receivables Inventory Investment in Bonds Investment in S Company $ 136,000 145,000 550,000 $ 220,000 250,000 475,000 270,000 2,048,000 2,016,000 645,000 5,540,000 Plant and Equipment (net) Land 885,000 500,000 Accounts Payable Bonds Payable Discount on Bonds Payable Common Stock Paid-in Capital Retained Earnings $ 268,800 700,000 $ 90,000 (20,000) 2,000,000 500,000 2,091,200 $5,540,000 600,000 230,000 1, 680, 000