Paper Company acquired 100 percent of Scissor Company's outstanding common stock for $370,000 on January 1,...

 

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Paper Company acquired 100 percent of Scissor Company's outstanding common stock for $370,000 on January 1, 2008, when the book value of Scissor's net assets was equal to $370,000, including Accumulated Depreciation of $24,000. Paper uses the equity method to account for investments. During 2008 Scissor Company's net income was $93,000 and declared dividends of $25,000. Trial balance date for Paper & Scissor as of December 31, 2008, are as follows: Balance Sheet Cash Accounts Receivable Inventory Investment in Scissor Co. Land Buildings & Equipment Cost of Goods Sold Depreciation expense Selling & Admin expense Dividends Declared Accumulated Depreciation Accounts payable Bonds Payable Common Stock Retained Earnings Sales Income from Scissor Trial Balance as of December 31, 2008 Paper Company S Debit 122,000 140,000 190,000 438,000 250,000 875.000 250,000 65,000 280,000 80,000 S Credit S Scissor Company Credit Debit 46,000 60,000 120,000 125,000 250,000 155,000 12,000 50,000 25,000- S 36,000 27,000 100,000 250,000- 120,000- 310,000 0 565,000 77,000 250,000 625,000 280,000 800,000 93,000- $ 2,690,000 $ 2,690,000 S 843,000 $843,000 Required a. (Prepare the journal entries on Paner's Books for the acquisition of Scissor on January 1, 2008. INEJISTROTID b. Prepare the normal equity method journal entry(ies) related to the investment in Scissor Company during 2008 (End of the 1" year) a. Prepare the eliminating/consolidation entries needed as of December 31, 2008, to complete a consolidation worksheet. Paper Company acquired 100 percent of Scissor Company's outstanding common stock for $370,000 on January 1, 2008, when the book value of Scissor's net assets was equal to $370,000, including Accumulated Depreciation of $24,000. Paper uses the equity method to account for investments. During 2008 Scissor Company's net income was $93,000 and declared dividends of $25,000. Trial balance date for Paper & Scissor as of December 31, 2008, are as follows: Balance Sheet Cash Accounts Receivable Inventory Investment in Scissor Co. Land Buildings & Equipment Cost of Goods Sold Depreciation expense Selling & Admin expense Dividends Declared Accumulated Depreciation Accounts payable Bonds Payable Common Stock Retained Earnings Sales Income from Scissor Trial Balance as of December 31, 2008 Paper Company S Debit 122,000 140,000 190,000 438,000 250,000 875.000 250,000 65,000 280,000 80,000 S Credit S Scissor Company Credit Debit 46,000 60,000 120,000 125,000 250,000 155,000 12,000 50,000 25,000- S 36,000 27,000 100,000 250,000- 120,000- 310,000 0 565,000 77,000 250,000 625,000 280,000 800,000 93,000- $ 2,690,000 $ 2,690,000 S 843,000 $843,000 Required a. (Prepare the journal entries on Paner's Books for the acquisition of Scissor on January 1, 2008. INEJISTROTID b. Prepare the normal equity method journal entry(ies) related to the investment in Scissor Company during 2008 (End of the 1" year) a. Prepare the eliminating/consolidation entries needed as of December 31, 2008, to complete a consolidation worksheet.