On January 2, 2016, Pope Company Acquired 90% of the Outstanding

Essay

On January 2, 2016, Pope Company acquired 90% of the outstanding common stock of Smithwick Company for $480,000 cash. Just before the acquisition, the balance sheets of the two companies were as follows: The fair values of Smithwick's assets and liabilities are equal to their book values with the exception of land.
Required:
A. Prepare the journal entry necessary to record the purchase of Smithwick's common stock.
B. Prepare a consolidated balance sheet at the date of acquisition.