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

question 38

Essay

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.

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