Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

-

Eliminations

P

S

Debit

Credit

Noncontrolling Interest

Consolidated Balances

ASSETS

Cash

$40,000

$30,000

Accounts

receivable-net

30,000

45,000

Inventories

185,000

165,000

Land

45,000

120,000

Plant assets-

net

480,000

240,000

Investment in

S Corp.

420,000

Difference between implied and book value

Goodwill

Total Assets

$1,200,000

$600,000

EQUITIES

Current

liabilities

$170,000

$150,000

Capital stock

600,000

300,000

Additional paid-in capital

150,000

90,000

Retained earnings

280,000

60,000

Noncontrolling interest

Total Equities

$1,200,000

$600,000

Required:

Complete the consolidated balance sheet workpaper for P Corporation and Subsidiary. * please type the answer in the computer"

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Business Of Personal Finance

Authors: Joseph Calandro Jr, John Hoffmire

1st Edition

1032104562, 978-1032104560

More Books

Students also viewed these Finance questions