P Company purchased 80% of the outstanding common stock of S Company on January 2, 2016, for $680,000. The composition o

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P Company purchased 80% of the outstanding common stock of SCompany on January 2, 2016, for $680,000. The composition of SCompany’s stockholders’ equity on January 2, 2016, and December 31,2017, was: 2/1/16 31/12/17 Common stock $540,000 $540,000 Othercontributed capital 325,000 325,000 Retained earnings (deficit)(60,000) 295,000 Total stockholders’ equity $805,000 $1,160,000During 2017, S Company earned $210,000 net income and declared a$60,000 dividend. Any difference between implied and book valuerelates to land. P Company uses the cost method to record itsinvestment in S Company. Required: A. Prepare any journal entriesthat P Company would make on its books during 2017 to record theeffects of its investment in S Company. B. Prepare, in generaljournal form, all workpaper entries needed for the preparation of aconsolidated statements workpaper on December 31, 2017.