Pascal Corporation paid $225,000 for a 70% interest in Sank Corporation on January 1, 2011.On that date, Sank's balance sheet accounts, at book value and fair value, were as follows:
Both companies use the parent company theory.Push-down accounting is used for the acquisition.
Required:
1.Prepare the journal entry on January 1, 2011 on Sank Corporation's books.
2.Prepare a balance sheet for Sank Corporation immediately after the acquisition on January 1, 2011.

Question

Pascal Corporation paid $225,000 for a 70% interest in Sank Corporation on January 1, 2011.On that date, Sank's balance sheet accounts, at book value and fair value, were as follows:
  Both companies use the parent company theory.Push-down accounting is used for the acquisition.
Required:
1.Prepare the journal entry on January 1, 2011 on Sank Corporation's books.
2.Prepare a balance sheet for Sank Corporation immediately after the acquisition on January 1, 2011.

Quizplus · Accepted Answer

The Answer of Pascal Corporation paid $225,000 for a 70% interest in Sank Corporation on January 1, 2011.On that date, Sank's balance sheet accounts, at book value and fair value, were as follows:
  Both companies use the parent company theory.Push-down accounting is used for the acquisition.
Required:
1.Prepare the journal entry on January 1, 2011 on Sank Corporation's books.
2.Prepare a balance sheet for Sank Corporation immediately after the acquisition on January 1, 2011.

Pascal Corporation Paid $225,000 for a 70% Interest in Sank