On July 1, 2017, Pushway Corporation issued 100,000 shares of common stock in exchange for all of Stroker Company's common stock. The Pushway stock issued had a market value of $500,000 on the date of the exchange. Following are the July 1, 2017, pre-acquisition balance sheets of Pushway and Stroker, plus fair value information for Stroker's assets and liabilities

Required:
1. Provide the journal entry Pushway recorded for the acquisition of Stroker, assuming Pushway used the acquisition method.
2. What amount will be shown on the July 1, 2017, consolidated balance sheet for the following:
a. Total assets
b. Total liabilities
c. Total equity
3. Now assume the pooling method was used to record the acquisition. Complete requirements 1 and 2.

Transcribed Image Text:

Stroker Pushway Book Value Falr Value Assets Current assets Long-term assets $300,000 600,000 $900,000 $100,000 400,000 $500,000 $100,000 470,000 $570,000 Total assets Liabilities Current liabilities Long-term liabilities $200,000 250,000 450,000 $ 50,000 00,000 150,000 50,000 120,000 $170,000 Total liabilities Stockholders Equity 250,000 00,000 350,000 $500,000 Common stock Retained earnings 300,000 150,000 450,000 900,000 Total stockholders equity Total liabilities and equity