PROBLEM III - PUSH DOWN ACCOUNTING On January 1, 20x4, Knight Corporation purchases all the outstanding shares of Craig Company for P950,000. It has been decided that Craig Company will use push-down accounting principles to account this transaction. The current balance sheet is stated at historical cost. The following balance sheet is prepared for Craig Company on January 1, 20x4: Cash 80,000 Current liabilities 90,000 Accounts receivable 260,000 Bonds payable 300,000 Prepaid expenses 20,000 Deferred taxes 50,000 Land 200,000 Common stock 300,000 Building (net) 600,000 Retained earnings 420,000 1,160,00 1,160,00 Total assets 0 Total liabilities and equity 0 Knight Corporation receives the following appraisals for Craig Company's assets and liabilities: Cash 80,000 Accounts receivable 260,000 Prepaid expenses 20,000