On December 31, 20X6, Print Corporation and Size Company entered into a business combination in which Print acquired all of Size’s common stock for $935,000. At the date of combination, Size had common stock outstanding with a par value of $100,000, additional paid-in capital of $400,000, and retained earnings of $175,000. The fair values and book values of all Size’s assets and liabilities were equal at the date of combination, except for the following:

The buildings had a remaining life of 20 years, and the equipment was expected to last another 10 years. In accounting for the business combination, Print decided to use push-down accounting on Size’s books. During 20X7, Size earned net income of $88,000 and paid a dividend of $50,000. All of the inventory on hand at the end of 20X6 was sold during 20X7. During 20X8, Size earned net income of $90,000 and paid a dividend of $50,000.

Required

a. Record the acquisition of Size’s stock on Print’s books on December 31, 20X6.

b. Record any entries that would be made on December 31, 20X6, on Size’s books related to the business combination if push-down accounting is employed.

c. Present all consolidation entries that would appear in the worksheet to prepare a consolidated balance sheet immediately after the combination.

d. Present all entries that Print would record during 20X7 related to its investment in Size if Print uses the equity method of accounting for its investment.

e. Present all consolidation entries that would appear in the worksheet to prepare a full set of consolidated financial statements for the year 20X7.

f. Present all consolidation entries that would appear in the worksheet to prepare a full set of consolidated financial statements for the year 20X8.

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Inventory Land Buildings Equipment Book Value $ 50,000 75,000 400,000 500,000 Fair Value $ 55,000 160,000 500,000 570,000