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.

Transcribed Image Text:

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