On January 1, 2014, Company P purchased 100 percent of the outstanding voting shares of Company S in the open market for $ 80,000 cash. On that date, the separate statements of financial position...

On January 1, 2014, Company P purchased 100 percent of the outstanding voting shares of Company S in the open market for $ 80,000 cash. On that date, the separate statements of financial position (summarized) of the two companies reported the following carrying amounts: It was determined on the date of acquisition that the fair value of the assets and liabilities of Company S were equal to their carrying amounts. Required: 1. Prepare the journal entry that Company P made at the date of acquisition to record the investment. If none is required, explain why. 2. Analyze the acquisition to determine the amount of goodwill purchased. 3. Prepare a consolidated statement of financial position immediately after acquisition. View Solution:

On January 1 2014 Company P purchased 100 percent of