3.6

Please, provide step by step solution.

E3-6 Prepare journal entries and balance sheet under push-down accounting Book values and fair values of Son Corporation's assets and liabilities on December 31, 2015, are as follows (in thousands): Cash Accounts receivablenet Inventories Land Buildingsnet Equipment-net Book Value $ 560 640 640 1,200 2,800 1,760 $7,600 $ 800 1,120 4,000 1,680 $7,600 Fair Value $ 560 640 800 1,600 4,000 2,400 $10,000 $ 800 1,200 Accounts payable Note payable Capital stock Retained earnings On January 1, 2016, Pop Corporation acquires all of Son's capital stock for $10,000,000 cash. The acquisition is recorded using push-down accounting. REQUIRED 1. Prepare the January 1 journal entry on Son's books to record push-down values. 2. Prepare a balance sheet for Son Corporation immediately after the acquisition on January 1 under push-down accounting