Use the information and assumptions from Problem P 11-9 for this problem. The accompanying financial statements are for Paw and Sun Corporations, one year after the acquisition. Note that Sun’s statements are presented first under contemporary theory with no push-down accounting, then under 90 percent push-down accounting, and finally, under 100 percent push-down accounting.
Sun mailed a check to Paw on December 31, 2012, to settle an account payable of $8,000. Paw received the check in 2013. The $8,000 amount is included in Paw’s December 31, 2012, accounts receivable.
REQUIRED: Prepare consolidation workpapers for Paw Corporation and Subsidiary for the year ended December 31, 2012, under
(a) 90 percent push-down accounting and
(b) 100 percent push-downaccounting.