On January 1, 2011, Ruark Corporation acquired a 40 percent interest in Batson, Inc , for $210,000 On that date, Batsons balance sheet disclosed net assets of $360,000 During 2011, Batson reported net income of $80,000 and paid cash dividends of $25,000 Ruark sold inventory costing $30,000 to Batso...

Purchase price of Batson stock 210000 Book value of Batson stock 360000 40 ...

On January 1, 2011, Ruark Corporation acquired a 40 percent interest in Batson, Inc., for $210,000. On

Question:

On January 1, 2011, Ruark acquired a 40 percent interest in Batson, Inc., for $210,000. On that date, Batson’s disclosed net assets of $360,000. During 2011, Batson reported net income of $80,000 and paid cash dividends of $25,000. Ruark sold inventory costing $30,000 to Batson during 2011 for $40,000. Batson used all of this merchandise in its operations during 2011.
Prepare all of Ruark’s 2011 journal entries to apply the equity method to this investment.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...