Please assist me with these problems, I wish I could award you more than 1500 po
ID: 2507880 • Letter: P
Question
Please assist me with these problems, I wish I could award you more than 1500 points but this the mzx the system allows.
Intercompany Bond Holdings at par 90% owned Subsidiary
Balance sheets for P Company and S Company on August 1, 2011, are as follows.
P. Company S Company
Cash $165,500 $106,000
Receivables 366,000 126,000
Inventory 61,000 108,000
Investment in Bond 306,000 -0-
Investment in S Company stock 586,500 - 0 -
Plant and Equipment (net) 573,000 320,000
Land 200,000 960,000
Total $2,458,000 $ 960,000
Account payable $174,000 $58,000
Accrued Expenses 32,400 26,000
Bonds payable 8% - 0- - 0-
Common stock 1,500,000 460,000
Other Contributed capital 260,000 60,000
Retained 461,600 156,000 TOTAL $2,458,000 $960,000
REQUIRED
Prepare a work paper for consolidated balance for P Company and its Subsidiary on August 1, 2011 taking into consideration the following.
1. P Company acquired 90% of the outstanding common stock of S company on August 1, 2011 for cash payment of $586,500.
2. Included in the investment in Bonds account is $40,000 par value of S Company bonds payable that were purchased at par by P Company in 2002. The bonds pay interest on April 30, and October 31. S Company has appropriately accrued interest expense on August 1, 2011; P Company, however; inadvertently failed to accrue interest income on the S company bonds.
Explanation / Answer
Consolidated Balance sheet as on August 11, 2011 Liability Amount Asset Amount Common stock(1500000+460000) 1960000 Plant & equipment(573000+320000) 893000 Contributed capital(260000+60000) 320000 Land(200000+960000) 1160000 Retained earnings(461600+156000) 617600 Inventory(61000+108000) 169000 Account payable(174000+58000) 232000 Receivable(366000+126000) 492000 Accrued expenses(32400+26000) 58400 Investment in bond 306000 Bonds payable 418500 Investmnent in S company 586500 Total 3606500 3606500