Question
P Corporation paid $420,000 for 70% of S Corporations $10 par common stock on December 31, 2016, when S Corporations stockholders equity was made up
P Corporation paid $420,000 for 70% of S Corporations $10 par common stock on December 31, 2016, when S Corporations stockholders equity was made up of $300,000 of Common Stock, $90,000 of Other Contributed Capital and $60,000 of Retained Earnings. Ss identifiable assets and liabilities reflected their fair values on December 31, 2016, except for Ss inventory which was undervalued by $60,000 and their land which was undervalued by $25,000. Balance sheets for P and S immediately after the business combination are presented in the partially completed work-paper below.
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| Eliminations |
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| P | S | Debit | Credit
| Noncontrolling Interest | Consolidated Balances |
ASSETS Cash | $40,000 | $30,000 |
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Accounts receivable-net | 30,000 | 45,000 |
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Inventories | 185,000 | 165,000 |
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Land | 45,000 | 120,000 |
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Plant assets- net | 480,000 | 240,000 |
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Investment in S Corp. | 420,000 |
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Difference between implied and book value |
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Goodwill |
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Total Assets | $1,200,000 | $600,000 |
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EQUITIES Current liabilities | $170,000 | $150,000 |
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Capital stock | 600,000 | 300,000 |
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Additional paid-in capital | 150,000 | 90,000 |
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Retained earnings | 280,000 | 60,000 |
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Noncontrolling interest |
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Total Equities | $1,200,000 | $600,000 |
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Required:
Complete the consolidated balance sheet workpaper for P Corporation and Subsidiary. * please type the answer in the computer"
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