P Corporation paid $440,000 for 80% of S Corporation's $10 par common stock on December 31, 20X6, when S Corporation's stockholders' equity was made up of $300,000 of Common Stock, $100,000 of Other Contributed Capital and $50,000 of Retained Earnings. S's identifiable assets and liabilities reflected their fair values on December 31, 20X6, except for S's inventory which was undervalued by $35,000 and their land which was undervalued by $25,000. Balance sheets for P and S immediately after the business combination are presented below. P Corp. S Corp. Assets Cash Accounts receivable (net) Inventory Land Plant assets (net) Investment in S Total assets 20,000 30,000 185,000 45,000 480,000 440,000 1,200,000 30,000 45,000 165,000 120,000 240,000 170,000 600,000 150,000 280.000 1,200,000 600,000 Liabilities and Equity Current liabilities Common stock Other contributed capital Retained earnings Total liabilities and equity Prepare the consolidated balance sheet as of December 31, 2016 and answer the following 150,000 300,000 90,000 60.000 600,000

P Corporation paid $440,000 for 80% of S Corporation's $10 par common stock on December 31, 20X6, when S Corporation's stockholders' equity was made up of $300,000 of Common Stock, $100,000 of Other Contributed Capital and $50,000 of Retained Earnings. S's identifiable assets and liabilities reflected their fair values on December 31, 20X6, except for S's inventory which was undervalued by $35,000 and their land which was undervalued by $25,000. Balance sheets for P and S immediately after the business combination are presented below. P Corp. S Corp. Assets Cash Accounts receivable (net) Inventory Land Plant assets (net) Investment in S Total assets 20,000 30,000 185,000 45,000 480,000 440,000 1,200,000 30,000 45,000 165,000 120,000 240,000 170,000 600,000 150,000 280.000 1,200,000 600,000 Liabilities and Equity Current liabilities Common stock Other contributed capital Retained earnings Total liabilities and equity Prepare the consolidated balance sheet as of December 31, 2016 and answer the following 150,000 300,000 90,000 60.000 600,000

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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Piper Specialty Store Ltd. completed the following merchandising transactions in the month of May 2021. At the beginning of May, Piper's ledger showed Cash $7,000; Accounts Receivable $1,900; Inventory $3,500; Common Shares $7,800; and Retained Earnings $4,600. Piper Specialty has experienced a return rate of 2% of sales and uses a perpetual inventory system. Purchased merchandise on account from Depot Wholesale Supply Ltd. for $5,340, terms 1/10, n/30, FOB shipping point. May 3 Freight charges of $137 were paid by the appropriate party on the merchandise purchased on May 1. Sold merchandise on account to Yip Company for $3,500, terms n/30, FOB destination. The cost of the merchandise was $2,400. 7 Freight charges of $86 were paid by the appropriate party on the May 4 sale. 8. Received a $140 credit from Depot Wholesale Supply when merchandise was returned. Paid Depot Wholesale Supply in full. 11 Purchased supplies for $390 cash. 14 Received payment in full from Yip Company for…
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