Homework SourseQ5P Corporation paid OR 420000 for 70 ownership in S Company
Q.5.P Corporation paid O.R 420,000 for 70% ownership in S Company on December 31, 2015, when S Corporation\'s stockholders\' equity was made up of O.R 300,000 of Common Stock, O.R 90,000 of Other Contributed Capital and O.R 60,000 of Retained Earnings. S\'s identifiable assets and liabilities reflected their fair values on December 3, 2015, except for S\'s inventory which was undervalued by O.R 60,000 and their land which was undervalued by O.R 25,000. Balance sheets for P and S immediately after the business combination are presented in the partially completed work-paper below ng lateres Ceusteliatd ASSETS O.R 40,00 O.R 30,00 30,00 45,00 185 165 45 assets- 240,00 fference between and book value Total Assets OR 1200 OR 600,00 EQUITIES urrent O.R 170 O.R 150 apital stock 600 300 paid-in capital 150 90, 280 60. Total Equities 600.00 Instructions: Complete the consolidated balance sheet workpaper for P Corporation and Subsidiary as on Dec. 31, 2015 (10 Marks) 
Solution
COMPUTATION OF CONSILDATED BALANCESHEET OF P CORPORATION WOKRING NOTES: NOTE1: SHARE HOLDING PATTERN IN S CORPORATION P CORPORATION SHARE= 70% MINORITY SHARE = 30% NOTE2: COMPUTATION OF REVISED REATIN EARNINGS OF S CORPORATION PARTICULARS AMOUNT RETAIN EARNINGS 60000 INVENTORY UNDERVALUED 60,000 LAND UNDERVALUED 25,000 NET LOSS 145,000 NOTE3: COMPUTATION OF MINORITY INTEREST PARTIUCLARS AMOUNT PAID UP CAPITAL 90000 SHARE IN NET LOSS 43,500 MINORITY INTEREST 133500 NOTE4: COMPUTATION OF GOODWILL OR CAPITAL RESERVE PARTICULARS AMOUNT INVENSTMENT VALUE 420000 SHARE CAPITAL (300,000) SHARE IN NET LOSS (101,500) GOOD WILL 18500 COMPUTATION OF CONSILDATED BALANCESHEET OF P CORPORATION PARITULARS AMOUNT CASH 70000 ACCOUNT RECIEVABLES 75000 INVENTORIES 410000 LAND 190000 PLANT ASSEST NET 720000 GOOD WILL 18500 TOTAL ASSETS 1483500 CURRENT LIABILITIES 320000 CAPITAL STOCK 600000 ADDITIONAL PAID UP CAPITAL 150000 RETAIN EARNINGS 280000 MINORITY INTEREST 133500 1483500