Question & Answer: On May 1, Burns Corporation acquired 100 percent of the outstanding ownership shares of Quigley Corporation in exchange for $702,500 ca…..

On May 1, Burns Corporation acquired 100 percent of the outstanding ownership shares of Quigley Corporation in exchange for $702,500 cash. At the acquisition date, Quigley’s book and fair values were as follows Book Value Cash Receivables Inventory Land Building and equipment (net) Patented technology Total assets Accounts payable Long-term liabilities Common stock ($5 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders equity Fair Value $ 107,500 $ 107,500 288,000 312,000 120,500 423,000 220,000 $1,137,000 34/0 288,000 238,000 164, 500 339,000 1,471,000 148,500 732,000 $.148,500 732,000 210,000 90,000 43,500 $1,137,000 Burns directs Quigley to seek additional financing for expansion through a new long-term debt issue. Consequently, Quigley will issue a set of financial statements separate from that of its new parent to support its request for debt and accompanying regulatory filings Quigley elects to apply pushdown accounting in order to show recent fair valuations for its assets Prepare a separate acquisition-date balance sheet for Quigley Corporation using pushdown accounting