Question
Part VI Push-Down Accounting (continued) Question B: Assume that Pop Corporation acquires a 90 percent interest in Son Corporation for $225,000 cash on January 1,
Part VI Push-Down Accounting (continued)
Question B:
Assume that Pop Corporation acquires a 90 percent interest in Son Corporation for $225,000 cash on January 1, 2016. Comparative balance sheets of the two companies immediately before the acquisition are as follows (in thousands):
Pop Son____________
Book Value Fair Value Book Value Fair Value
Cash $300 $300 $ 10 $ 10
Accounts Receivable, net 100 100 35 40
Inventories 110 140 45 55
Other current assets 30 30 10 10
Plant assets net 200 270 70 95
Total assets 740 840 170 210
Liabilities 100 100 20 20
Capital stock, $10 par 500 130
Retained earnings 140 20
Total equities 740 170
Required:
- Write down the journal entry to record the 100 percent push-down adjustment (entity theory) on Sons separate books at January 1, 2016.
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