On 1/1/14, P. Inc. acquired 70% of the outstanding shares of S. Comp. for $1141000 in cash. The price paid was proportionate to S's total fair value; although at the date of acquisition S. had a total book value of $1380000. All assets and liabilities had fair values equal to book values except for a patent (6yr remaining life) that was undervalued on S's records by $240000. On 1/1/15, P. acquired an additional 25% common stock equity interest in S. for $415000 in cash. P. uses the equity method to account for S. S's net income and dividends for the two years are: 2014: Net Income=$340000, Dividends=$150000. 2015: Net Income= 440000; Dividends=180000.
A. Show P's journal entry to record the 1/1/15 acquisition of an additional 25% ownership of S. Company.
B. Prepare a schedule showing P's 12/31/2015 equity method balance for the investment in S. account.