The first two columns of Exhibit 14.13 present information from the accounting records of Company P and Company S on December 31, 2014. Company P acquired 100% of the common stock of Company S on January 1, 2013, when the balance in Company S’s retained earnings was $40,000. Company P attributes any excess of acquisition cost over the carrying value of the net assets of Company S to a building with a 10-year remaining life as of January 1, 2013. Company P holds a note issued by Company S in the amount of $16,400 on December 31, 2014.
a. Enter the appropriate amounts in the Consolidated column for a consolidated balance sheet of Company P and Company S on December 31, 2014.
b. Compute the acquisition cost of Company P’s investment in Company S on January 1, 2013.
c. Prepare an analysis that explains the changes in the Investment in Company S account between January 1, 2013, and December 31,2014.

  • CreatedMarch 04, 2014
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