Subsidiary Company S had the following stockholders’ equity on January 1, 2018, prior to issuing 20,000 additional new shares to noncontrolling shareholders: Common stock ($1 par), 100,000 shares issued and outstanding . . . . . . . Paid-incapitalinexcessofpar .................................. Retainedearnings ............................................ Totalequity ............................................... $ 100,000 1,900,000 2,000,000 $4,000,000 At that time, the parent company owned 90,000 Company S shares. Assume that the parent acquired the shares at a price equal to their book value. What is the impact on the parent’s investment account of the sale of 20,000 additional shares by the subsidiary for $45 per share? University of the Virgin x Bb Home Page - ACC 443 X← → C<=ធAuvi-bookshelf.vitalsource.com/reader/books/9781305464803/pageid/485Worksheet 8-2Treasury Stock Method for Parent Shares Owned by SubsidiaryCompany P and Subsidiary Company SWorksheet for Consolidated Financial StatementsFor Year Ended December 31, 20171212131415161734Investment in Company P (10%, at cost)5Equipment6 Accumulated Depreciation7Common Stock Company P8 Retained Earnings, January 1, 2017-Company P9 Common Stock Company St101118(Credit balance amounts are in parentheses.)19Investment in Company S (80%)Retained Earnings, January 1, 2017-Company SSalesCost of Goods SoldExpensesSubsidiary IncomeTreasury Stock (at cost)Consolidated Net IncomeTo NCI (see distribution schedule)My Courses Home XType here to search밥University of the Virgin x b Subsidiary Company S X G Subsidiary Company SX +Trial BalanceCompany P248,000608,000(100,000)(500,000)(200,000)(300,000)180,00080,000(16,000)0Company S80,000180,000(50,000)(100,000)(90,000)(200,000)120,00060,000026°C Mostly clearQ AA4620PXENG19:18US 03/03/2023>:/1142 > ← → C<=ធUniversity of the Virgin x Bb Home Page - ACC 443 XA14 Expenses15 Subsidiary Incomeuvi-bookshelf.vitalsource.com/reader/books/9781305464803/pageid/48516171819202123Treasury Stock (at cost)22 Retained Earnings, Controlling Interest, December 31, 2017Consolidated Net IncomeTo NCI (see distribution schedule)Balance to Controlling Interest (see distribution schedule)Total NCIEliminations and Adjustments:(A)(TS)My Courses Home X(CY)(EL)(D)/(NCI)Type here to searchUniversity of the Virgin x b Subsidiary Company S X G Subsidiary Company SX +밥80,000(16,000)Eliminate the entry made by the parent during the current year to record its share of Company S income.Eliminate 80% of the January 1, 2017, subsidiary equity balances against the investment in Company S account.Distribute the excess of cost over book value and the NCI adjustment to the equipment account as specified bythe determination and distribution of excess schedule applicable to the Investment in Company S.Amortize the excess of $100,000 for the past two years and the current year at the rate of $5,000 per year.The investment in Company P must be at cost. If any equity adjustments have been made, they must be reversed andthe investment in the parent returned to cost. If the shares are to be reissued, as is the case in this example, the investmentis then transferred to the treasury stock account, a contra account to total consolidated stockholders' equity.As an alternative to entry (TS), the cost of the treasury shares could be used to retire them on the worksheet as follows:Common Stock-Company PRetained Earnings Company PInvestment in Company P.060,000050,00030,00080,00026°C Mostly clearQAA4620XENG19:18US 03/03/2023>:/1142 >

Note - Since you have asked multiple questions, we will answer only first question as per bartleby…

Answered: Subsidiary Company S had the following…

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q