Y incorporation acquired $100\%$ of z incorporation outstanding common stock at a cost of $$390,000$ on $31/12/2022.$ The analysis of the parent's investment account as of the acquisition date shoed the following:

Amount

Account

Book value element

$200,000$

Common stock

$100,000$

Retained earnings

$300,000$

Total

Under$-$ or over$-$valuation

$1$ month $(5,000)$

Inventory

Indefinite

$20,000$

Land

$5$ years

$50,000$

Equipment

Indefinite

$25,000$

Goodwill element

$90,000$

Total

$390,000$

Total acquisition cost

Results for $2023$ based on book values

Reported income $40,000$

Dividends declared $20,000$

: Required

a$.$ What entries would y record in its general ledger related to z$\text{'}$s income and dividends for $2023$ under the equity method?

b$.$ Pass the basic elimination entry.

C$.$ Pass the excess value reclassification entry.

d$.$ Pass the amortized excess value reclassification entry.

Answer rating: 100% (QA)

a Entries for Ys general ledger related to Zs income and dividends for 2023 under the equity method ... View the full answer