Professor Beck Spring 2017 Accountancy 401 Accounting Error Problem On 1/1/X1, P purchased 40%of S Company for $440,000. At the time of purchase, S...

On 1/1/X1, P purchased 40%of S Company for $440,000. At the time of purchase, S reported Capital Stock of $500,000 and Retained Earnings of $500,000. An appraisal of Sâs assets indicated that land was under-valued by $20,000 and equipment was over-valued by $10,000. No other assets were found to be mis-valued. S uses the straight-line method for depreciating its equipment and the remaining useful life of the equipment is five years