On January 1, 2016, Poplar Company acquired 80% of the common stock of Sequoia Company for $400,000. On this date, Sequoia had total owners' equity of $400,000. The excess of cost over book value was due to a patent with remaining life of 10 years. Poplar adopted the simple equity method to account for its investment in Sequoia.

 

Sequoia's income for the three years 2016 through 2018 is $80,000, $60,000, and $100,000 respectively. All income is earned evenly throughout the year; Sub has paid no dividends.

On July 1, 2019, Poplar Company sold 10% of the total stock of Sequoia for $70,000, reducing its investment percentage to 70%. Prepare Poplar's general journal entries for 2019.

Answer rating: 100% (QA)

To prepare Poplar Companys general journal entries for 2019 we need to consider the following transactions 1 Record the income from Sequoia Company for the year 2019 Investment in Sequoia Equity Metho... View the full answer