On December 31,20X9,Thessaly Corporation Acquired All of Ionian Company's Common

question 29

Essay

On December 31,20X9,Thessaly Corporation acquired all of Ionian Company's common shares,for $570,000 cash.On that date,Ionian's balance sheet appeared as follows:
The fair values of all of Ionian's assets and liabilities were equal to their book values except for the following:
In recording this acquisition,push-down accounting was used.
Required:
1)Record the acquisition of Ionian's stock on Thessaly's books on December 31,20X9.
2)Record any entries that would be made on December 31,20X9,on Ionian's books related to the business combination.
3)Present all eliminating entries that would appear in the worksheet to prepare a consolidated balance sheet immediately after the combination.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available for the business's day-to-day operations.

Year 2

This typically refers to the second year in a multi-year financial analysis or projection.

Average Collection Period

The average number of days it takes for a business to receive payments owed by its customers, indicating the efficiency of the company's credit and collection policies.

Year 2

A term referring to the second year of a particular time frame, often used in financial and performance analysis.