Paper Company acquired 80 percent of Scissor Companys outstanding common stock for $296,000 on January 1, 20X8,

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. Paper uses the equity method to account for investments. Trial balance data for Paper and Scissor as of January 1, 20X8, are as follows:

Required
a. Prepare the journal entry on Paper’s books for the acquisition of Scissor Co. on January 1, 20X8.
b. Prepare a consolidation worksheet on the acquisition date, January 1, 20X8, in good form.
c. Prepare a consolidated balance sheet on the acquisition date, January 1, 20X8, in goodform.

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Paper Company Scissor Company Assets Cash Accounts Receivable Inventory Investment in Scissor Stock 109,000 25,000 37,000 125,000 87,000 65,000 296,000 Land Buildings & Equipment Accumulated Depreciation 280,000 125,000 875,000 250,000 (500,000) (24,000) 1,250,000 500,000 Total Assets Liabilities & Stockholders Equity Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities & Equity 95,000 30,000 250,000 100,000 625,000 250,000 280,000 120,000 1,250,000 500,000