On January 1, 2013, Spark Corp. acquired a 40% interest in Cranston Inc. for $250,000. On that date, Cranstons balance sheet disclosed net assets of
On January 1, 2013, Spark Corp. acquired a 40% interest in Cranston Inc. for $250,000. On that date, Cranston’s balance sheet disclosed net assets of $430,000. During 2013, Cranston reported net income of $100,000 and paid cash dividends of $30,000. Spark sold inventory costing $40,000 to Cranston during 2013 for $50,000. Cranston used all of this merchandise in its operations during 2013. Any excess cost over fair value is attributable to an unamortized trademark with a 20 year remaining life.
Required:
Prepare all of Spark’s journal entries for 2013 to apply the equity method to this investment.
Amortization Calculation
| Purchase Price of Cranston Stock | $ |
| Less: Equivalent book value of Cranston Inc. stock | |
| Trademark | $ |
| Life in years (maximum) | ÷ |
| Annual amortization | $ |
Step by Step Solution
3.59 Rating (152 Votes )
There are 3 Steps involved in it
Pass the journal entries Investment in C Inc Account title and exp... View full answer
Get step-by-step solutions from verified subject matter experts
100% Satisfaction Guaranteed-or Get a Refund!
Document Format (2 attachments)
608e9a1f64949_20487.pdf
180 KBs PDF File
608e9a1f64949_20487.docx
120 KBs Word File
See step-by-step solutions with expert insights and AI powered tools for academic success
-
Access 30 Million+ textbook solutions.
-
Ask unlimited questions from AI Tutors.
-
Order free textbooks.
-
100% Satisfaction Guaranteed-or Get a Refund!
Claim Your Hoodie Now!
Fundamentals of Advanced Accounting
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
5th edition
978-0077924379, 77924371, 978-0078025396, 78025397, 978-0077425654, 77425650, 978-0077667061
Study Smart with AI Flashcards
Access a vast library of flashcards, create your own, and experience a game-changing transformation in how you learn and retain knowledge
Explore Flashcards
Study Help
