Business, 28.07.2020 21:01 rogersdeloris1ovgm3b

On December 31, 20X6, Print Corporation and Size Company entered into a business combination in which Print acquired all of Size’s common stock for $989,000. At the date of combination, Size had common stock outstanding with a par value of $115,000, additional paid in capital of $406,000, and retained earnings of $194,000. The fair values and book values of all Size’s assets and liabilities were equal at the date of combination, except for the following: Book Value Fair Value
Inventory 59,000 64,000
Land 80,000 168,000
Buildings 414,000 501,000
Equipment 501,000 573,000
The buildings had a remaining life of 16 years, and the equipment was expected to last another 6 years. In accounting for the business combination, Print decided to use push-down accounting on Size’s books.
During 20X7, Size earned net income of $97,000 and paid a dividend of $70,000. All of the inventory on hand at the end of 20X6 was sold during 20X7. During 20X8, Size earned net income of $99,000 and paid a dividend of $70,000.
Required:
a. Record the acquisition of Size's stock on Print's books on December 31, 20X6.
Record the initial investment in Size Co.
b. Record any entries that would be made on December 31, 20X6, on Size’s books related to the business combination if push-down accounting is employed.
Record the evaluation of the assets of Size Co.
c. Present all consolidating entries that would appear in the worksheet to prepare a consolidated balance sheet immediately after the combination.
Record the basic consolidation entry.
d. Present all entries that Print would record during 20X7 related to its investment in Size if Print uses the equity-method of accounting for its investment.
Record the dividend received from Size Co.
Record the equity method income/loss.
e. Present all consolidating entries that would appear in the worksheet to prepare a full set of consolidated financial statements for the year 20X7.
Record the basic consolidation entry.
f. Present all consolidating entries that would appear in the worksheet to prepare a full set of consolidated financial statements for the year 20X8.
Record the basic consolidation entry.

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On December 31, 20X6, Print Corporation and Size Company entered into a business combination in whic...

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