Record the acquisition of ionians stock on thessaly books

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Reference no: EM131735258

Problem - On December 31, 20X9, Thessaly Corporation acquired all of Ionian Company's common shares, for $560,000 cash. On that date, Ionian's balance sheet appeared as follows:

Assets


Liabilities


Cash

$80,000

Current Payables

$50,000

Accounts Receivables

40,000

Notes Payable

70,000

Inventory

100,000

Stockholders' Equity


Land

120,000

Common Stock

150,000

Building and Equipment (net)

260,000

Additional Capital

200,000



Retained Earnings

130,000





Total

$600,000

Total

$600,000

The fair values of all of Ionian's assets and liabilities were equal to their book values except for the following:


Fair Value

Inventory

$140,000

Land

150,000

Buildings and Equipment

270,000

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 consolidating entries that would appear in the worksheet to prepare a consolidated balance sheet immediately after the combination.

Reference no: EM131735258

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