P Corporation Acquired 80% of S Corporation on January 1,2017

question 6

Essay

P Corporation acquired 80% of S Corporation on January 1,2017 for $240,000 cash when S's stockholders' equity consisted of $100,000 of Common Stock and $30,000 of Retained Earnings.The difference between the price paid by P and the underlying equity acquired in S was allocated solely to a patent amortized over 10 years.
P sold merchandise to S during the year in the amount of $30,000.$10,000 worth of inventory is still on hand at the end of the year with an unrealized profit of $4,000.The separate company statements for P and S appear in the first two columns of the partially completed consolidated workpaper.
Required:
Complete the consolidated workpaper for P and S for the year 2017.
P Corporation and Subsidiary
Consolidated Statements Workpaper
December 31,2017

---

Definitions:

Equilibrium Quantity

The quantity of goods or services supplied is equal to the quantity demanded at the market price.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, leading to a balance in the market.

Consumer Preference

The inclination of consumers toward certain products or services over others based on their characteristics, such as taste, quality, and price.

Equilibrium

An equilibrium in the market where demand matches supply, thereby stabilizing prices.