1. On January 1, 2018, P Co. acquired 80 percent of S Co. for $400,000 cash. On the date of acquisition, S reported common stock

1. On January 1, 2018, P Co. acquired 80 percent of S Co. for $400,000 cash. On the date of acquisition, S reported common stock outstanding of $350,000 and retained earnings of $70,000. It held land with a book value of $180,000 and a market value of $210,000, and equipment with a book value of $80,000 and a market value of $98,000 at the date of combination. All depreciable assets held by S at the date of acquisition had a remaining economic life of eight years. S reported net income of $20,000 and dividends of $3,000 for 2019. Goodwill is not impaired since acquisition. P uses the equity method in accounting for its Investment in S.

a) Provide the journal entries recorded by P on 12/31/ 2019 on its books to account for its investment in S

b) Provide all consolidation entries needed on 12/31/ 2019

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