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.
-On January 1, 2014, Penny Company acquired a 90% interest in Lampire Company for $180,000 cash. On January 1, 2014, 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, 2014.
2. Assume both companies use the parent company theory. Record the push-down adjustment on Lampire's separate books 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.
-On January 1, 2014, Penny Company acquired a 90% interest in Lampire Company for $180,000 cash. On January 1, 2014, 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, 2014.
2. Assume both companies use the parent company theory. Record the push-down adjustment on Lampire's separate books 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.
-On January 1, 2014, Penny Company acquired a 90% interest in Lampire Company for $180,000 cash. On January 1, 2014, 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, 2014.
2. Assume both companies use the parent company theory. Record the push-down adjustment on Lampire's separate books on January 1, 2014.

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