The difference between the implied value and the book value at the acquisition date was: *

$97,500

$609,375

$507,000

It is impossible to know

The eliminating entries required to prepare the consolidated financial statements on December 31, 2020 would include: *

A credit to Dividend Declared by $600,000

A credit to Dividends Income by $480,000

A credit to Investment in S by $2,047,500

None of the above

P Companys net income for year 2020 from independent operations was: *

$240,480,000

$60,480,000

$240,372,000

None of the above

The share of the non-controlling interest from the net income of S company during 2020 since acquisition was: *

20% of P Companys net income

$400,000

$1,600,000

None of the above

The consolidated Retained earnings on January 1, 2020 was: *

$45,000,000

$1,400,000

$44,400,000

None of the above

The non-controlling interest had a value of $ ----- in the consolidated balance sheet on December 31, 2020: *

$791,875

$511,875

$231,875

None of the above

In the entry prepared to establish reciprocity on December 31, 2021: *

Investment in S should be debited by $2,000,000 and Retained Earnings should be credited by $2,000,000

Investment in S should be debited by $1,400,000 and Retained Earnings should be credited by $1,400,000

Investment in S should be credited by $1,400,000 and Retained Earnings should be debited by $1,400,000

No need for a reciprocity entry when using the cost method

Use the following to answer the seven questions below On January 1, 2020, P Company purchased 80% of the outstanding common stock of s Company for $2,047,500 cash. Any difference between book value and purchase price is allocated to Goodwill. The company uses the cost method. The following Trial Balances were extracted from each company's records at December 31, 2020: P Company S Company Debit Credit Debit Credit Cash 43,582,500 2,500,000 Receivables 700,000 300,000 Investment in s 2.047.500 PPE (net) 2.800.000 1,200,000 Patent 350,000 400,000 Accounts payable 350,000 150,000 Other Liabilities 2,100,000 900.000 Common Stock ($5 par value) 1,050,000 450,000 OCC 2,100,000 900,000 Retained Earnings 1/1/2020 1,400,000 600.000 Dividends Declared 18,000,000 600,000 Sales 240,000,000 8,000,000 Dividends Income 480,000 Cost of Goods Sold 108,000,000 3,600,000 Operating Expenses 72,000,000 2,400,000 Total 247,480,000 247,480,000 11,000,000 11,000,000