Question
UNIT 4 POST PROBLEM 1 On December 31, 200X P Corporation paid $300,000 cash for 80% of the common stock of S Company which becomes
UNIT 4 POST PROBLEM 1 On December 31, 200X P Corporation paid $300,000 cash for 80% of the common stock of S Company which becomes a subsidiary. Following information is shown prior to the acquisition being recorded: P Company Assets Liabilities and Equity Cash 580,000 Liabilities 90,000 Inventories 60,000 Plant 340,000 Common Stock, $5pv 100,000 Paid in Capital 200,000 Retained Earnings 590,000 Total 980,000 Total 980,000 S Company Assets Liabilities and Equity Inventories 20,000 Liabilities 30,000 Other assets 40,000 Long Term Debt 50,000 Plant 140,000 Common Stock, $10pv 40,000 Paid in Capital 20,000 Retained Earnings 60,000 Total 200,000 Total 200,000 S market values are: Plant $250,000 Inventory $50,000 1. Prepare the entries in journal format to record the acquisition and post to the general edger accounts. 2. Prepare a consolidation workpaper. 3. Prepare consolidated balance sheet.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started