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On January 1, 2018, P acquired 80% of the outstanding voting common stock of S. for $364,000 There is no active market for S's stock.
On January 1, 2018, P acquired 80% of the outstanding voting common stock of S. for $364,000 There is no active market for S's stock. Of this payment, $28,000 was allocated to equipment (with a five-year life) that had been undervalued on S's books by $35,000. Any remaining excess was attributable to goodwill, which has not been impaired. 2. As of December 31, 2018, before preparing the consolidated worksheet, the financial statements appeared as follows S 420,000 Revenues Cost of goods sold Operating expenses Net income $280,000 (196,000) (112,000) (14,000) 000 $154.000 S 420,000 196,000 $210,000 154,000 Retained earnings, 1/1/18 Net income (above) Dividends paid Retained earnings, 12/31/18 S 616,000 $364,000 Cash and receivables Inventory Investment in S Equipment (net) Total assets $126,000 154,000 $ 294,000 210,000 364,000 616,000 420,000 S1484000 $700 Liabilities Common stock Retained earnings, 12/31/18 (above) Total liabilities and stockholders' equity $ 588,000 280,000 616,000 $196,000 140,000 364,000 During 2018, P bought inventory for $112,000 and sold it to S for $150,000. Only half of the inventory purchase price had been remitted to P by S at year-end. As of December 31, 2018, 60% of these goods remained in the company's possession. 1. What is the consolidation entry for eliminating the effects of 2018 intra-entity inventory transfer? 2. What is the total of consolidated revenues? 3. What is the total of consolidated operating expenses
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