Prado, Inc. bought 30% of Heyward Company on January 1, 2020 for $270,000. The equity method...

 

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Prado, Inc. bought 30% of Heyward Company on January 1, 2020 for $270,000. The equity method was used. No amortization was required. In 2020, Heyward shipped to Prado merchandise with a cost of $18,000 and a selling price of $27,000. One-third of the merchandise remained in Prado's inventory at year-end and was sold in 2021. In 2021, Heyward received merchandise from Prado, who recorded a gross profit of $24,000 on the sale. One-fourth of the merchandise remained in ending inventory. Heyward reported net income of $60,000 in 2020 and $72,000 in 2021. Dividends of $7,200 were paid to Prado each year. Prepare all equity method entries for 2021. Prado, Inc. bought 30% of Heyward Company on January 1, 2020 for $270,000. The equity method was used. No amortization was required. In 2020, Heyward shipped to Prado merchandise with a cost of $18,000 and a selling price of $27,000. One-third of the merchandise remained in Prado's inventory at year-end and was sold in 2021. In 2021, Heyward received merchandise from Prado, who recorded a gross profit of $24,000 on the sale. One-fourth of the merchandise remained in ending inventory. Heyward reported net income of $60,000 in 2020 and $72,000 in 2021. Dividends of $7,200 were paid to Prado each year. Prepare all equity method entries for 2021.

Answer rating: 100% (QA)

solution Given data Missoma merchandise with a cost 18000 selling price 27000 ... View the full answer