Parrco acquired 100% of Sarrco's outstanding common stock on 1/1/06 for cash of $400,000. Selected information for Sarrco as of 1/1/06 follows:
^aNet of accumulated depreciation of $300,000.
Assume that Parrco elected to use non-push-down accounting.
Required:
a. Prepare the entry to record the combination.
b. Prepare an analysis of the investment account by components.
c. Prepare all consolidation entries as of 1/1/06.

Question

Parrco acquired 100% of Sarrco's outstanding common stock on 1/1/06 for cash of $400,000. Selected information for Sarrco as of 1/1/06 follows:

^aNet of accumulated depreciation of $300,000.
Assume that Parrco elected to use non-push-down accounting.
Required:
a. Prepare the entry to record the combination.
b. Prepare an analysis of the investment account by components.
c. Prepare all consolidation entries as of 1/1/06.

Quizplus · Accepted Answer

The Answer of Parrco acquired 100% of Sarrco's outstanding common stock on 1/1/06 for cash of $400,000. Selected information for Sarrco as of 1/1/06 follows: ^aNet of accumulated depreciation of $300,000. Assume that Parrco elected to use non-push-down accounting. Required: a. Prepare the entry to record the combination. b. Prepare an analysis of the investment account by components. c. Prepare all consolidation entries as of 1/1/06.

Parrco Acquired 100% of Sarrco's Outstanding Common Stock on 1/1/06