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Assignment
P Corporation acquired 80% of S Corporation on January 1, 2014 for $240,000 cash when S's stockholders' equity consisted of $100,000 of Common Stock and $30,000 of Retained Earnings. The difference between the price paid by P and the underlying equity acquired in S was allocated solely to a patent amortized over 10 years.
P sold merchandise to S during the year in the amount of $30,000. $10,000 worth of inventory is still on hand at the end of the year with an unrealized profit of $4,000. The separate company statements for P and S appear in the first two columns of the partially completed consolidated workpaper.
Required:
Complete the consolidated workpaper for P and S for the year 2014.
P Corporation and Subsidiary
Consolidated Statements Workpaper
P
S
Eliminations
Noncontrolling Interest
Consolidated Balances
Corp.
Dr.
Cr.
Income Statement
Sales
200,000
150,000
Dividend Income
16,000
Cost of Sales
-92,000
-47,000
Other Expenses
-23,000
-40,000
Noncontrolling Interest in Income
Net Income
101,000
63,000
Retained Earnings Statement
Retained Earnings 1/1
110,000
30,000
Add: Net Income
Less: Dividends
-30,000
-20,000
Retained Earnings 12/31
181,000
73,000
Balance Sheet
Cash
20,000
19,000
Accounts Receivable-net
120,000
55,000
Inventories
140,000
80,000
Patent
Land
270,000
420,000
Equipment and Buildings-net
600,000
430,000
Investment in S Corporation
240,000
Total Assets
1,390,000
1,004,000
Equities
Accounts Payable
909,000
831,000
Common Stock
300,000
100,000
Retained Earnings
1/1 Noncontrolling Interest in Net Assets
12/31 Noncontrolling Interest in Net Assets
Total Equities
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