Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

Intercompany Bond Holdings at par 90% owned Subsidiary Balance sheets for P Comp

ID: 2507904 • Letter: I

Question

Intercompany Bond Holdings at par 90% owned Subsidiary







Balance   sheets for P Company and S Company on August 1, 2011, are as follows.

















THE BALANCE SHEET WAS DONE, SO PLEASE DO THE ELIMINATIONS ON THE SECOND PAGE










P. Company S Company

Cash




$165,500
106,000


Receivables




366,000
126,000


Inventory




261,000
108,000


Investment in Bond




306,000
  -0-


Investment   in S Company stock



586,500
  - 0 -


Plant and Equipment (net)




573,000
320,000


Land




200,000
$300,000


     Total




2,458,000
$960,000














Account payable




$174,000
$58,000


Accrued Expenses




32,400
26,000


Bonds payable 8%




       - 0-
200,000


Common stock




1,500,000
460,000


Other Contributed capital




260,000
60,000


Retained




491,600
156,000


TOTAL




$2,458,000
$960,000














REQUIRED










Prepare   a work paper for consolidated balance for P Company and its Subsidiary on   August 1, 2011 taking into consideration the following.       P   Company acquired 90% of the outstanding common stock of S company on August   1, 2011 for cash payment of $586,500.
Included in   the investment in Bonds account is $40,000 par value of S Company bonds   payable that



were   purchased at par by P Company in 2002. The bonds pay interest on April 30,   and October 31.



S Company   has appropriately accrued interest expense on August 1, 2011; P Company,   however;



















































P COMPANY AND   SUBSIDIARY Consolidated   Balance Sheet Workpaper August 1, 2011
P
S
Eliminations
Noncontrolling
Consolidated
Company
Company
Dr.
Cr.
Interest
Balance Cash          165,500
        106,000







Receivables          366,000
           126,000   



  



  











Inventory          261,000
        108,000





Investment in Bonds          306,000









Investment in S Company Stock          586,500




















Plant and Equipment          573,000
        320,000







Land          200,000
        300,000







     Total        2,458,000
          960,000

















    Accounts Payable          174,000
          58,000







Accrued Expenses            32,400
          26,000


















Bonds Payable, 8%

        200,000







Common Stock:    









    P Company        1,500,000









    S Company

        460,000







Other Contributed Capital:










    P Company          260,000









    S Company

          60,000







Retained Earnings:










    P Company          491,600









    S Company

        156,000







Noncontrolling Interest







     Total          2,458,000
          960,000




   









Journal entry descriptions


































Intercompany Bond Holdings at par 90% owned Subsidiary







Balance   sheets for P Company and S Company on August 1, 2011, are as follows.

















THE BALANCE SHEET WAS DONE, SO PLEASE DO THE ELIMINATIONS ON THE SECOND PAGE










P. Company S Company

Cash




$165,500
106,000


Receivables




366,000
126,000


Inventory




261,000
108,000


Investment in Bond




306,000
  -0-


Investment   in S Company stock



586,500
  - 0 -


Plant and Equipment (net)




573,000
320,000


Land




200,000
$300,000


     Total




2,458,000
$960,000














Account payable




$174,000
$58,000


Accrued Expenses




32,400
26,000


Bonds payable 8%




       - 0-
200,000


Common stock




1,500,000
460,000


Other Contributed capital




260,000
60,000


Retained




491,600
156,000


TOTAL




$2,458,000
$960,000














REQUIRED










Prepare   a work paper for consolidated balance for P Company and its Subsidiary on   August 1, 2011 taking into consideration the following.       P   Company acquired 90% of the outstanding common stock of S company on August   1, 2011 for cash payment of $586,500.
Included in   the investment in Bonds account is $40,000 par value of S Company bonds   payable that



were   purchased at par by P Company in 2002. The bonds pay interest on April 30,   and October 31.



S Company   has appropriately accrued interest expense on August 1, 2011; P Company,   however;



















































P COMPANY AND   SUBSIDIARY Consolidated   Balance Sheet Workpaper August 1, 2011
P
S
Eliminations
Noncontrolling
Consolidated
Company
Company
Dr.
Cr.
Interest
Balance Cash          165,500
        106,000







Receivables          366,000
           126,000   



  



  











Inventory          261,000
        108,000





Investment in Bonds          306,000









Investment in S Company Stock          586,500




















Plant and Equipment          573,000
        320,000







Land          200,000
        300,000







     Total        2,458,000
          960,000

















    Accounts Payable          174,000
          58,000







Accrued Expenses            32,400
          26,000


















Bonds Payable, 8%

        200,000







Common Stock:    









    P Company        1,500,000









    S Company

        460,000







Other Contributed Capital:










    P Company          260,000









    S Company

          60,000







Retained Earnings:










    P Company          491,600









    S Company

        156,000







Noncontrolling Interest







     Total          2,458,000
          960,000




   









Journal entry descriptions


































Intercompany Bond Holdings at par 90% owned Subsidiary

Explanation / Answer

Consolidated Balance sheet as on August 11, 2011 Liability Amount Asset Amount Common stock(1500000+460000) 1960000 Plant & equipment(573000+320000) 893000 Contributed capital(260000+60000) 320000 Land(200000+960000) 1160000 Retained earnings(461600+156000) 617600 Inventory(61000+108000) 169000 Account payable(174000+58000) 232000 Receivable(366000+126000) 492000 Accrued expenses(32400+26000) 58400 Investment in bond 306000 Bonds payable 418500 Investmnent in S company 586500 Total 3606500 3606500

Hire Me For All Your Tutoring Needs
Integrity-first tutoring: clear explanations, guidance, and feedback.
Drop an Email at
drjack9650@gmail.com
Chat Now And Get Quote