mework Paper Company acquired 100 percent of Scissor Company's outstanding common stock for $370,000 on January...
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mework Paper Company acquired 100 percent of Scissor Company's outstanding common stock for $370,000 on January 1, 20X8, when th book value of Scissor's net assets was equal to $370,000. Paper uses the equity method to account for investments. Trial balance for Paper and Scissor as of December 31, 20X8, are as follows: Cash Accounts Receivable Inventory Investment in Scissor Company Land Buildings and Equipment Cost of Goods Sold Depreciation Expense Selling and Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Scissor Company Total Paper Company Scissor Company Debit Credit $ 122,000 Debit $ 46,000 Credit 140,000 190,000 60,000 120,000 438,000 0 250,000 125,000 875,000 250,000 250,000 155,000 65,000 12,000 280,000 50,000 80,000 25,000 $ 565,000 77,000 $ 36,000 27,000 250,000 100,000 625,000 250,000 280,000 120,000 800,000 310,000 93,000 0 $ 2,690,000 $ 2,690,000 843,000 $ 843,000 (Assume the company prepares the optional Accumulated Depreciation Elimination Entry.) Required: a. Prepare the journal entries on Paper's books for the acquisition of Scissor on January 1, 20X8, as well as any normal equity me entry(ies) related to the investment in Scissor Company during 20X8. b. Prepare a consolidation worksheet for 20X8. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the journal entries on Paper's books for the acquisition of Scissor on January 1, 20X8, as well as any normal equity method entry(ies) related to the investment in Scissor Company during 20X8. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet A. B Record the initial investment in Scissor Company. Note: Enter debits before credits. Event General Journal Debit Credit 1 Investment in Scissor Company 370,000 Cash 370,000 Clear entry Record entry View general Journal Required A Required B > mework Paper Company acquired 100 percent of Scissor Company's outstanding common stock for $370,000 on January 1, 20X8, when th book value of Scissor's net assets was equal to $370,000. Paper uses the equity method to account for investments. Trial balance for Paper and Scissor as of December 31, 20X8, are as follows: Cash Accounts Receivable Inventory Investment in Scissor Company Land Buildings and Equipment Cost of Goods Sold Depreciation Expense Selling and Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Scissor Company Total Paper Company Scissor Company Debit Credit $ 122,000 Debit $ 46,000 Credit 140,000 190,000 60,000 120,000 438,000 0 250,000 125,000 875,000 250,000 250,000 155,000 65,000 12,000 280,000 50,000 80,000 25,000 $ 565,000 77,000 $ 36,000 27,000 250,000 100,000 625,000 250,000 280,000 120,000 800,000 310,000 93,000 0 $ 2,690,000 $ 2,690,000 843,000 $ 843,000 (Assume the company prepares the optional Accumulated Depreciation Elimination Entry.) Required: a. Prepare the journal entries on Paper's books for the acquisition of Scissor on January 1, 20X8, as well as any normal equity me entry(ies) related to the investment in Scissor Company during 20X8. b. Prepare a consolidation worksheet for 20X8. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the journal entries on Paper's books for the acquisition of Scissor on January 1, 20X8, as well as any normal equity method entry(ies) related to the investment in Scissor Company during 20X8. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet A. B Record the initial investment in Scissor Company. Note: Enter debits before credits. Event General Journal Debit Credit 1 Investment in Scissor Company 370,000 Cash 370,000 Clear entry Record entry View general Journal Required A Required B >
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Answer rating: 100% (QA)
Paper Company Scissor Company Elimination Consolidated Revenues 2690000 0 2690000 Cost of Goods Sold 1225000 0 1225000 Gross Profit 1465000 0 1465000 ... View the full answer
Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
Posted Date:
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