The consolidated balance sheet for Pand S Companies on the date ofacquisition will include: *Investment in S Co. of $0Common Stock of $640,000Retained Earnings of $136,000Long-term notes payable of $30,000None of the options is correct 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

Consolidation is the merger of two or more entities where one large company acquire share capital of…

The consolidated balance sheet for P and S Companies on the date of acquisition will include: * O Investment in S Co. of $0 Common Stock of $640,000 Retained Earnings of $136,000 Long-term notes payable of $30,000 None of the options is correct O O O O

The consolidated balance sheet for P and S Companies on the date of acquisition will include: * O Investment in S Co. of $0 Common Stock of $640,000 Retained Earnings of $136,000 Long-term notes payable of $30,000 None of the options is correct O O O O

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 4PB

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