Pop Company acquired all of Soda Corporation’s common shares on January 2, 20X3, for $789,000. At the date of combination, Soda’s balance sheet appeared as follows:

The fair values of all of Soda’s assets and liabilities were equal to their book values except for its fixed assets. Soda’s land had a fair value of $75,000; the buildings had a fair value of $300,000; and the equipment had a fair value of $340,000.

Pop Company decided to employ push-down accounting for the acquisition of Soda Corporation. Subsequent to the combination, Soda continued to operate as a separate company.

Required

a. Record the acquisition of Soda’s stock on Pop’s books.

b. Present any entries that would be made on Soda’s books related to the business combination, assuming push-down accounting is used.

c. Present, in general journal form, all consolidation entries that would appear in a consolidation worksheet for Pop Company and its subsidiary prepared immediately following the combination.

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Assets Cash & Receivables Inventory Land Buildings (net) Equipment (net) Total $ 34,000 165,000 60,000 250,000 320,000 $829,000 Liabilities Current Payables Notes Payable Stockholders' Equity Common Stock Additional Capital Retained Earnings Total $ 25,000 100,000 200,000 425,000 79,000 $829,000