Pushdown Accounting Assume a parent company acquires its subsidiary by paying $1,200,000 for all of the outstanding voting shares of the investee. On the acquisition date, subsidiary's assets and liabilities have individual fair values that equal their book values, except for property equipm with a fair value greater than book value by $150,000 and license with a fair value greater than book value by $250,000. The parent an subsidiary have the following balance sheets immediately after the acquisition, but before any pushdown adjustments by the subsidia Parent Subsidiary Assets: Cash & receivables S 800,000 $ 100,000 Inventory 600,000 200,000 Property & equipment, net 2,300,000 775,000 Equiry investment 1,200,000 Licenses 25,000 $ 4,900,000 $1,100,000 Liabilities and stockholders' equity: Current liabilities $ 400,000 $ 150,000
Pushdown Accounting Assume a parent company acquires its subsidiary by paying $1,200,000 for all of the outstanding voting shares of the investee. On the acquisition date, subsidiary's assets and liabilities have individual fair values that equal their book values, except for property equipm with a fair value greater than book value by $150,000 and license with a fair value greater than book value by $250,000. The parent an subsidiary have the following balance sheets immediately after the acquisition, but before any pushdown adjustments by the subsidia Parent Subsidiary Assets: Cash & receivables S 800,000 $ 100,000 Inventory 600,000 200,000 Property & equipment, net 2,300,000 775,000 Equiry investment 1,200,000 Licenses 25,000 $ 4,900,000 $1,100,000 Liabilities and stockholders' equity: Current liabilities $ 400,000 $ 150,000
Chapter1: Financial Statements And Business Decisions
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