Chapter 3, Problem 31P

a.

To determine

Prepare a worksheet to consolidate the financial information for these two companies.

b.

To determine

Compute the following amounts that would appear on Company P’s 2015 separate (nonconsolidated) financial records if Company P’s investment accounting was based on the equity method:

• Subsidiary income
• Retained earnings, 1/1/15
• Investment in Strata

c.

To determine

Identify the effect which the parent’s internal investment accounting method has on its consolidated financial statements.