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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.

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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 E3-6 thousands): Book Value Fair Value Cash $ 560 $ 560 640 800 1,600 4,000 2,400 $10,000 $ 800 Accounts receivable-net 640 Inventories 640 Land 1,200 2,800 1,760 $7,600 $ 800 1,120 4,000 1,680 $7,600 Buildings-net Equipment-net Accounts payable Note payable Capital stock Retained earnings 1,200 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.
Transcribed Image Text: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 E3-6 thousands): Book Value Fair Value Cash $ 560 $ 560 640 800 1,600 4,000 2,400 $10,000 $ 800 Accounts receivable-net 640 Inventories 640 Land 1,200 2,800 1,760 $7,600 $ 800 1,120 4,000 1,680 $7,600 Buildings-net Equipment-net Accounts payable Note payable Capital stock Retained earnings 1,200 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.
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