Problem 3-1 The two following separate cases show the financial position of a parent company and its subsidiary company on November 30, 2014, just after the parent had purchased 90% of the subsidiary's stock: Current assets Investment in S Company Long-term assets Other assets Total Case I P Company S Company $ 885,900 $258,700 188,400 1,394,300 401,500 89,900 39,900 $2,558,500 $700,100 Case II P Company S Company $ 783,500 $278,500 188,400 1,200,800 401,500 70,500 69,300 $2,243,200 $749,300 Current liabilities Long-term liabilities Common stock Retained earnings Total $ 634,800 856,100 598,600 469,000 $2,558,500 $268,000 291,700 181,300 (40,900 ) $700,100 $ 703,400 928,400 598,600 12,800 $2,243,200 $259,600 270,500 181,300 37,900 $749,300 Case I: Prepare a November 30, 2014, consolidated balance sheet workpaper. Any difference between book value of equity and the value implied by the purchase price relates to subsidiary long-term assets. (Round answers to o decimal places, e.g. 125.) P COMPANY AND SUBSIDIARY Consolidated Balance Sheet Workpaper November 30, 2014 Eliminations Dr. Cr. Noncontrolling Interest Consolidated Balance Case I Company Company Current Assets $885,900 $258,700 1,144,600 Investment in S Company 188,400 188400 Difference between Implied and Book Value 68933 68933 Long-term Assets 1,394,300 401,500 68933 1864733 Other Assets 89,900 39,900 129800 Total Assets 2,558,500 700,100 3139133 Current Liabilities 634,800 268,000 902800 Long-term Liabilities 856,100 291,700 1147800 Common Stock: P Company 598,600 598600 S Company 181,300 181300 Retained Earnings P Company 469,000 469000 S Company (40,900 ) 40900 Noncontrolling Interest 20933 20933 20933 Total Liabilities and Equity $2,558,500 $700,100 319166 319166 3139133 Click if you would like to Show Work for this question: Open Show Work Your answer is partially correct. Try again. Assume that Company S's balance sheet is the same as the balance sheet used in Case I (from part a). Suppose that there were 50,000 shares of S Company common stock outstanding and that Company P acquired 90% of the shares for $5.00 a share. Shortly after acquisition, the noncontrolling shares were selling for $4.75 a share. Prepare a computation and allocation of difference schedule considering this information. (Round answers to O decimal places, e.g. 125.) Parent Non- Controlling Share Entire Value Share Purchase Price and Implied Value 188400 Less Book Value of Equity Acquired Difference Between Implied and Book Value x Increase Long-term Assets to Fair Value Balance Click if you would like to Show Work for this question: Open Show Work