(a)
Concept Introduction: A stock adjustment is put to use to make adjustments in the stocks for any given reason including the donations and write-offs. Further, the product value can be adjusted using the same process.
The adjustments to be made in S’s accounts and the new accounts and amounts that will be recorded if Paulos buys 100% of S’s common stock for $1200000.
(b)
Concept Introduction: A stock adjustment is put to use to make adjustments in the stocks for any given reason including the donations and write-offs. Further, the product value can be adjusted using the same process.
The adjustments to be made in S’s accounts and the new accounts and amounts that will be recorded if Paulos buys 80% of S’s common stock for $960000.

Want to see the full answer?
Check out a sample textbook solution
Chapter 2 Solutions
ADVANCED ACCOUNTING