Pascal Corporation paid $225,000 for a 70% interest in Sank Corporation on January 1,2014.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 1,2014 on Sank Corporation's books.
2.Prepare a balance sheet for Sank Corporation immediately after the acquisition on January 1,2014.

Question

Pascal Corporation paid $225,000 for a 70% interest in Sank Corporation on January 1,2014.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 1,2014 on Sank Corporation's books.
2.Prepare a balance sheet for Sank Corporation immediately after the acquisition on January 1,2014.

Quizplus · Accepted Answer

The Answer of Pascal Corporation paid $225,000 for a 70% interest in Sank Corporation on January 1,2014.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 1,2014 on Sank Corporation's books.
2.Prepare a balance sheet for Sank Corporation immediately after the acquisition on January 1,2014.

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