On January 1,2011,Penny Company acquired a 90% interest in Lampire Company for $180,000 cash.On January 1,2011,Lampire Company had the following assets and liabilities:
Push-down accounting is used for the acquisition.
Required:
1.Assume both companies use the entity theory.Record the push-down adjustment on Lampire's separate books on January 1,2011.
2.Assume both companies use the parent company theory.Record the push-down adjustment on Lampire's separate books on January 1,2011.

Question

On January 1,2011,Penny Company acquired a 90% interest in Lampire Company for $180,000 cash.On January 1,2011,Lampire Company had the following assets and liabilities:
  Push-down accounting is used for the acquisition.
Required:
1.Assume both companies use the entity theory.Record the push-down adjustment on Lampire's separate books on January 1,2011.
2.Assume both companies use the parent company theory.Record the push-down adjustment on Lampire's separate books on January 1,2011.

Quizplus · Accepted Answer

The Answer of On January 1,2011,Penny Company acquired a 90% interest in Lampire Company for $180,000 cash.On January 1,2011,Lampire Company had the following assets and liabilities:
  Push-down accounting is used for the acquisition.
Required:
1.Assume both companies use the entity theory.Record the push-down adjustment on Lampire's separate books on January 1,2011.
2.Assume both companies use the parent company theory.Record the push-down adjustment on Lampire's separate books on January 1,2011.

On January 1,2011,Penny Company Acquired a 90% Interest in Lampire