Chapter 4, Problem 4.24AE

a.

To determine

Introduction:

Push down accounting: Push-down accounting is a form of bookkeeping used by businesses when they buy out another firm. To prepare the financial statements of the acquired company, the acquirer’s accounting basis is used. In the process, the target company’s assets and liabilities are adjusted to reflect the acquisition cost, rather than the historical cost.

The journal entry in the books of P’s for acquisition of S’s Corporation stock.

b.

To determine

Introduction:

Revaluation of assets: Fixed asset revaluation is an operation that can be acquired in order to accurately describe the true value of capital assets held by a corporation.

The journal entry in the books of S’s Corporation related to business combination.

c.

To determine

Introduction:

Consolidation worksheet: A consolidation worksheet is a tool used to prepare a consolidated financial statement of the parent company and its subsidiary.

The eliminating entries to prepare consolidation financial statement.