P Company purchased 90% of the common stock of S Company on January 2, 2014 for $900,000.On that date, S Company's stockholders' equity was as follows: $\begin{array}{lr}
\text { Common stock, } \$ 20 \text { par value } & \$ 400,000 \
\text { Other contributed capital } & 100,000 \
\text { Retaned earnings } & 450,000
\end{array}$
During 2014, S Company earned $200,000 and declared a $100,000 dividend.P Company uses the partial equity method to record its investment in S Company.The difference between implied and book value relates to land.
Required:
Prepared, in general journal form, all eliminating entries for the preparation of a consolidated statements workpaper on December 31, 2014.

Question

P Company purchased 90% of the common stock of S Company on January 2, 2014 for $900,000.On that date, S Company's stockholders' equity was as follows: $\begin{array}{lr}
\text { Common stock, } \$ 20 \text { par value } & \$ 400,000 \
\text { Other contributed capital } & 100,000 \
\text { Retaned earnings } & 450,000
\end{array}$ 
During 2014, S Company earned $200,000 and declared a $100,000 dividend.P Company uses the partial equity method to record its investment in S Company.The difference between implied and book value relates to land.
Required:
Prepared, in general journal form, all eliminating entries for the preparation of a consolidated statements workpaper on December 31, 2014.

Quizplus · Accepted Answer

The Answer of P Company purchased 90% of the common stock of S Company on January 2, 2014 for $900,000.On that date, S Company's stockholders' equity was as follows: $\begin{array}{lr}
\text { Common stock, } \$ 20 \text { par value } & \$ 400,000 \
\text { Other contributed capital } & 100,000 \
\text { Retaned earnings } & 450,000
\end{array}$ 
During 2014, S Company earned $200,000 and declared a $100,000 dividend.P Company uses the partial equity method to record its investment in S Company.The difference between implied and book value relates to land.
Required:
Prepared, in general journal form, all eliminating entries for the preparation of a consolidated statements workpaper on December 31, 2014.

P Company Purchased 90% of the Common Stock of S