Part VI Push-Down Accounting (continued)

Question B:

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:

1. Write down the journal entry to record the 100 percent push-down adjustment (entity theory) on Sons separate books at January 1, 2016.