Assume that Pop Corporation acquires a 90 percent interest in Son Corporation for $225,000 cash on January
Fantastic news! We've Found the answer you've been seeking!
Question:
Assume that Pop Corporation acquires a 90 percent interest in Son Corporation for $225,000 cash on January 1, 2016. Comparative balance sheets of the two companies immediately before the acquisition are as follows (in thousands):
Pop Son____________
Book Value Fair Value Book Value Fair Value
Cash $300 $300 $ 10 $ 10
Accounts Receivable, net 100 100 35 40
Inventories 110 140 45 55
Other current assets 30 30 10 10
Plant assets – net 200 270 70 95
Total assets 740 840 170 210
Liabilities 100 100 20 20
Capital stock, $10 par 500 130
Retained earnings 140 20
Total equities 740 170
Required:
- Write down the journal entry to record the 100 percent push-down adjustment (entity theory) on Son’s separate books at January 1, 2016.
Related Book For
Advanced Accounting
ISBN: 978-0134472140
13th edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
Posted Date: