Problem

Assets and Accounts Payable Transferred to SubsidiaryTab Corporation decided to establish...

Assets and Accounts Payable Transferred to Subsidiary

Tab Corporation decided to establish Collon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Collon issued Tab 30,000 shares of $6 par value common stock. The following information is provided on the assets and accounts payable transferred:

 

Cost

Book Value

Fair Value

Cash

$ 25,000

$ 25,000

$ 25,000

Inventory

70,000

70,000

70,000

Land

60,000

60,000

90,000

Buildings

170,000

130,000

240,000

Equipment

90,000

80,000

105,000

Accounts Payable

45,000

45,000

45,000

Required

a. Give thejournal entry that Tab recorded for the transfer of assets and accounts payable to Collon.\


b. Give thejournal entry that Collon recorded for the receipt of assets and accounts payable from Tab.

Step-by-Step Solution

Request Professional Solution

Request Solution!

We need at least 10 more requests to produce the solution.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)


All students who have requested the solution will be notified once they are available.
Add your Solution
Textbook Solutions and Answers Search