On March 1 2015 Collier Enterprises purchases a 100 interest
On March 1, 2015, Collier Enterprises purchases a 100% interest in Robby Corporation for $480,000 cash. Robby Corporation applies push-down accounting principles to account for this acquisition.
Robby Corporation has the following balance sheet on February 28, 2015:
Collier Enterprises receives an independent appraisal on the fair values of Robby Corporation’s assets and liabilities. The controller has reviewed the following figures and accepts them as reasonable:
Accounts receivable . . . . . . . . . . $ 60,000
Inventory . . . . . . . . . . . . . . . . . . . 100,000
Land. . . . . . . . . . . . . . . . . . . . . . . 55,000
Buildings . . . . . . . . . . . . . . . . . . . 200,000
Equipment . . . . . . . . . . . . . . . . . . 150,000
Current liabilities . . . . . . . . . . . . . 50,000
Bonds payable . . . . . . . . . . . . . . 98,000
Required
1. Record the investment in Robby Corporation.
2. Prepare the value analysis schedule and the determination and distribution of excess schedule.
3. Give Robby Corporation’s adjusting entry.
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