On January 1, 20x8, P corporation acquired 90 percent of S company's voting stock, at underlying book value. The fair value of the noncontrolling interest was equal to 10 percent of the book value of S at that date. The next day S filed for bankruptcy. The amount of accumulated depreciation at the time of purchase was $50,000. On December 31, 20x8, the trial balances of the two companies are as follows:

Questions

1. Give the journal entries in 20x8

2. Give all consolidating entries required on December 31, 20x8, to prepare consolidated financial statements.

P S DR. CR. DR. CR. current assets $225,500 $65,000 depreciable assets $300,000 $225,000 investment in Scorr $144,000 Depreciation expense $30,000 $25,000 Other expense $180,000 $85,000 Dividends declared $40,000 $10,000 Accumulated depreciation $150,000 $100,000 Current liabilities $45,000 $20,000 Long-Term Debt $75,000 $90,000 Common Stock $100,000 $75,000 Retained earnings $282,500 0 Sales $253,500 $125,000 Income from S $13,500