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.
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P Corporation and Subsidiary
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Consolidated Statements Workpaper
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P
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S
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Eliminations
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Noncontrolling Interest
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Consolidated Balances
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Corp.
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Corp.
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Dr.
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Cr.
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Income Statement
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Sales
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200,000
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150,000
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Dividend Income
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16,000
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Cost of Sales
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-92,000
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-47,000
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Other Expenses
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-23,000
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-40,000
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Noncontrolling Interest in Income
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Net Income
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101,000
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63,000
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Retained Earnings Statement
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Retained Earnings 1/1
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110,000
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30,000
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Add: Net Income
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101,000
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63,000
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Less: Dividends
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-30,000
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-20,000
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Retained Earnings 12/31
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181,000
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73,000
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Balance Sheet
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Cash
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20,000
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19,000
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Accounts Receivable-net
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120,000
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55,000
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Inventories
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140,000
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80,000
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Patent
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Land
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270,000
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420,000
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Equipment and Buildings-net
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600,000
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430,000
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Investment in S Corporation
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240,000
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Total Assets
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1,390,000
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1,004,000
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Equities
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Accounts Payable
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909,000
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831,000
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Common Stock
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300,000
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100,000
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Retained Earnings
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181,000
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73,000
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1/1 Noncontrolling Interest in Net Assets
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12/31 Noncontrolling Interest in Net Assets
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Total Equities
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1,390,000
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1,004,000
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