Question 1 (6 points) P Corporation acquired 80% of H Co. on January 1, 2015 for $420,000 cash when H's stockholders' equity consisted of $300,000 of Common Stock and $100,000 of Retained Earnings. The difference between the price paid by P and the underlying equity acquired in H was due to a $25,000 undervaluation of H's inventory, a $50,000 undervaluation of H's Property, Plant and Equipment (PPE) and goodwill. The separate company statements for P and I appear in the first two columns of the partially completed consolidation working papers. The undervalued inventory was sold by H during 2015, and the undervalued PPE had a remaining useful life of 5 years. Howed P. $8,000 on account payable at December 31, 2015... Required: A- Complete the consolidation working papers for P and H for the year 2015. "Show the steps of your calculations and entries" Consolidated Balance Sheet Working Papers at December 31, 2015 Eliminations H Debit Credit Consolidated INCOME STATEMENT Sales $ 400,000 $220,000 Income from H. 36,000 Cost of Sales (160,000) (80,000) Depreciation expense (80,000) (40,000) Other Expenses (51,000) (20,000) 145,000 80,000 150,000 100,000 80,000 (80,000) (40,000) $ 215.000 $ 140,000 Net income Retained Earnings 1/1 Add: Net income Less: Dividends Retained Earnings 31/12 BALANCE SHEET Cash Accounts Receivable-net Dividend Receivables Inventories 59,000 60,000 56,000 80,000 16.000 80,000 60,000 Land PPE Investment in H Co. 30.000 530,000 424,000 60.000 340,000 TOTAL ASSETS Accounts payable Dividend Payable Other payables Capital Stock $ 1.195,000 600,000 80,000 100,000 200,000 20,000 100,000 40,000 600,000 300,000 Retained Earnings 31/12 215,000 140,000 TOTAL LIAB. & EQUITY S 1.195,000 600,000