Subject : Advanced Accounting

Case 2 P Corporation owns 90% of the common stock of s Company. The stock was purchased for $810,000 on January 1, 2017, when S Company's retained earnings were $150,000. Financial data for 2021 are presented here: P Company S Company Sales $1,650,000 $ 795,000 Equity in Subsidiary Income 91,125 Total Reve 1.741.125 195.000 Cost of Goods Sold: 225,000 165.000 525.000 1.275,000 1,500,000 690,000 172,500 210,000 1,290,000 $17,500 310,500 206,250 723.750 1.600,500 $ 140,625 Beginning Inventory Purchases Cost of Goods Available Less: Ending Inventory Cost of Goods Sold Other Expenses Total Cost and Expense Net Income 1/1 Retained Famings Net Income Dividends Declared 12/31 Retnined Eamings Cash Accounts Receivable Inventory Investment in Company $ 71,250 798,000 140,625 (150,000) 180,000 71.250 (60.000 $ 191,250 5 788,625 $93.000 319,500 $75,000 168,750 172,500 210,000 833,625 Other Assets 750,000 630,000 Total Assets $2,206,125 $1,046,250 105,000 45,000 112.500 60,000 Accounts Payable Other Current Liabilities Capital Stock Retained Earning Total Liabilities and Equity 750,000 1.200,000 288,625 191.250 $2,206,125 $1,046,250 The January 1, 2021, inventory of P Corporation includes $45,000 of profit recorded by S Company on 2020 sales. During 2021, S Company made intercompany sales of $300,000 with a mackup of 20% of selling price. The ending inventory of P Corporation includes goods purchased in 2021 from S Company for $75,000. P Corporation uses equity method to record its investment in S Company. Required: Prepare the consolidated statements workpaper for the year ended December 31, 2021 (40%)