On July 1, 20X1, Pushway Corporation issued 100,000 shares of common stock in exchange for all of Stroker Company’s common stock. The Pushway stock issued had a market value of $500,000 on the date of the exchange. Following are the July 1, 20X1, pre-acquisition balance sheets of Pushway and Stroker, plus fair value information for Stroker’s assets and liabilities:

Required:

1. Provide the journal entry Pushway recorded for the acquisition of Stroker, assuming Pushway used the acquisition method.

2. What amount will be shown on the July 1, 20X1, consolidated balance sheet for the following:

a. Total assets

b. Total liabilities

c. Total equity

3. Now assume this transaction had been completed prior to the elimination of poolings of interest, and that the pooling method had been used to record the acquisition. Redo requirements 1 and 2.

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Stroker Pushway Book Value Fair Value Assets Current assets $300,000 600,000 $100,000 400,000 $100,000 470,000 Long-term assets Total assets $900,000 $500,000 $570,000 Liabilities $ 50,000 100,000 $ 50,000 $200,000 250,000 Current liabilities Long-term liabilities 120,000 Total liabilities 450,000 150,000 $170,000 Stockholders' Equity Common stock 300,000 150,000 250,000 Retained earnings 100,000 Total stockholders' equity 450,000 350,000 Total liabilities and equity $900,000 $500,000