Paper Company acquired 80 percent of Scissor Company's outstanding common stock for $296,000 on January 1, 20X8,
Question:
Paper Company acquired 80 percent of Scissor Company's outstanding common stock for
$296,000 on January 1, 20X8, when the book value of Scissor's net assets was equal to $370,000. Problem 3-37 summarizes the first year of Paper's ownership of Scissor.
In Problem 3-37
Paper uses the equity method to account for investments. The following trial balance summarizes the financial position and operations for Paper and Scissor as of December 31, 20X9:
Required
a. Prepare any equity method journal entry(ies) related to the investment in Scissor Company during 20X9.
b. Prepare a consolidation worksheet for 20X9 in goodform.
Paper Company Scissor Company Credit Credit Accounts Receivable Investment in Scissor Stock Buildings & Equipment Cost of Goods Sold 2 0 Selling & Administrative Expense Bonds Payable Common Stock 3 Retained Earnings Income from Scissor 2 2,671,400 2 843,000 Paper Company Scissor Company Credit Credit Accounts Receivable Investment in Scissor Stock Buildings & Equipment Cost of Goods Sold 5 Selling & Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable 630,000 2 Retained Earnings 2,935,000 2 981,000
Step by Step Answer:
a Equity Method Entries on Paper Cos Books Investment in Scissor Co 85600 Income ...View the full answer
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
Related Video
A trial balance is a list of all the general ledger accounts contained in the ledger of a business. This list will contain the name of each nominal ledger account and the value of that nominal ledger balance. Each nominal ledger account will hold either a debit balance or a credit balance
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