Pistol Corporation purchased 100 percent ownership of Scope Products on January 1, 20X6, for $56,000, at which
Fantastic news! We've Found the answer you've been seeking!
Question:
Pistol Corporation purchased 100 percent ownership of Scope Products on January 1, 20X6, for $56,000, at which time Scope Products reported retained earnings of $10,000 and capital stock outstanding of $30,000. The differential was attributable to patents with a life of eight years. Income and dividends of Scope Products were
| Year | Net Income | Dividends | ||
| 20X6 | $16,000 | $ 6,000 | ||
| 20X7 | 24,000 | 8,000 | ||
| 20X8 | 32,000 | 8,000 |
Required
1. Give the equity method entries that Pistol should record to account for this investment in 20X6, 20X7, and 20X8.
2. What is the balance of the Investment in Scope account on Pistol's balance sheet at December 31, 20X8, after all required equity method entries have been recorded?
Expert Answer:
Related Book For 
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
Posted Date:
