Book values and fair values of Sli Corporation's assets and liabilities on December 31, 2010, are as follows (in thousands):
Book Value Fair Value
Cash ............................... $ 280 .......... $ 280
Accounts receivable-net ........ 320 ............. 320
Inventories ......................... 320 ............. 400
Land ................................ 600 ............. 800
Buildings-net .................. 1,400 .......... 2,000
Equipment-net .................. 880 ........... 1,200
$3,800 ......... $5,000
Accounts payable ............... $ 400 .......... $ 400
Note payable ....................... 560 ............ 600
Capital stock ..................... 2,000
Retained earnings ................. 840
$3,800
On January 1, 2011, Por Corporation acquires all of Sli's capital stock for $5,000,000 cash. The acquisition is recorded using push-down accounting.
REQUIRED
1. Prepare the January 1 journal entry on Sli's books to record push-down values.
2. Prepare a balance sheet for Sli Corporation immediately after the acquisition on January 1 under pushdown accounting.