Question - P Company acquired 54,000 shares of the common stock of S Company on January 1, 2011, for $950,000 cash. The stockholders' equity section of S Company's balance sheet on that date was as follows:

Common stock, $10 par value $600,000

Other contributed capital 80,000

Retained earnings 320,000

Total $1,000,000

On the date of acquisition, S Company owed P Company $10,000 on open account.

Required: Present, in general journal form, the elimination entries for the preparation of a consolidated balance sheet workpaper on January 1, 2011. The difference between the value implied by the purchase price of the investment and the book value of the net assets acquired relates to subsidiary land.