Use the following information to answer the question(s) below.
On January 1, 2014, Penelope Company acquired a 90% interest in Leah Company for $180,000 cash. On January 1, 2014, Leah Company had the following assets and liabilities:
Push-down accounting is used for the acquisition.
-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

Use the following information to answer the question(s) below.
On January 1, 2014, Penelope Company acquired a 90% interest in Leah Company for $180,000 cash. On January 1, 2014, Leah Company had the following assets and liabilities:
  Push-down accounting is used for the acquisition.
-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 Use the following information to answer the question(s) below.
On January 1, 2014, Penelope Company acquired a 90% interest in Leah Company for $180,000 cash. On January 1, 2014, Leah Company had the following assets and liabilities:
  Push-down accounting is used for the acquisition.
-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.

Use the Following Information to Answer the Question(s) Below