P Company purchased 80% of theoutstanding common stock of SCompany on January 2, 2011, for$360,000. And any differencebetween the value implied by thepurchase price of the investment andthe book value of net assets acquiredrelates to subsidiary land. The bookvalues of S Company's other assetsand liabilities are equal to their fairvalues. Balance sheets for PCompany and S Companyimmediately after the stockacquisition were as follows:P Company$ 166,000S CompanyS 80,000Current assetsInvestment in S CompanyPlant and equipment (net)360,000-0-560,000224,000Land40,000120,000Total$1.126,000$424,000$ 100,000$ 28,000Current liabilitiesLong-term notes payableCommon stock-0-36,000480,000160,000Other contributed capitaRetained earnings244,00064,000302,000136,000$424,000Total$1.126,000 The consolidated balance sheet for Pand S Companies on the date ofacquisition will include: *Current Assets of $244,000Current Liabilities of $144,000Noncontrolling Interest of $90,000Land of $160,000O None of the options is correct

The non-controlling interest (NCI) is a position of ownership where one holds even less than half of…

The consolidated balance sheet for P and S Companies on the date of acquisition will include: * Current Assets of $244,000 Current Liabilities of $144,000 Noncontrolling Interest of $90,000 O Land of $160,000 None of the options is correct O O

The consolidated balance sheet for P and S Companies on the date of acquisition will include: * Current Assets of $244,000 Current Liabilities of $144,000 Noncontrolling Interest of $90,000 O Land of $160,000 None of the options is correct O O

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

P Company purchased 80% of the
outstanding common stock of S
Company on January 2, 2011, for
$360,000. And any difference
between the value implied by the
purchase price of the investment and
the book value of net assets acquired
relates to subsidiary land. The book
values of S Company's other assets
and liabilities are equal to their fair
values. Balance sheets for P
Company and S Company
immediately after the stock
acquisition were as follows:
P Company
$ 166,000
S Company
S 80,000
Current assets
Investment in S Company
Plant and equipment (net)
360,000
-0-
560,000
224,000
Land
40,000
120,000
Total
$1.126,000
$424,000
$ 100,000
$ 28,000
Current liabilities
Long-term notes payable
Common stock
-0-
36,000
480,000
160,000
Other contributed capita
Retained earnings
244,000
64,000
302,000
136,000
$424,000
Total
$1.126,000

The consolidated balance sheet for P
and S Companies on the date of
acquisition will include: *
Current Assets of $244,000
Current Liabilities of $144,000
Noncontrolling Interest of $90,000
Land of $160,000
O None of the options is correct

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