Turner Corporation reported the following balances at January 1, 20X9:

On January 1, 20X9, Gross Corporation purchased 100 percent of Turner's stock. All tangible assets had a remaining economic life of 10 years at January 1, 20X9. Both companies use the FIFO inventory method. Turner reported net income of $16,000 in 20X9 and paid dividends of $3,200. Gross uses the equity method in accounting for its investment in Turner.

Required
Give all journal entries that Gross recorded during 20X9 with respect to its investment assuming Gross paid $437,500 for the ownership of Turner on January 1, 20X9. The amount of the differential assigned to goodwill is notimpaired.

Transcribed Image Text:

Item Book Value Fair Value Cash Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Total Assets $ 45,000 60,000 120,000 300,000 (150,000) $375,000 45,000 60,000 130,000 240,000 $475,000 75,000 Accounts Payable Common Stock ($10 par value) Additional Paid-In Capital Retained Earnings Total Liabilities & Equities $ 75,000 100,000 30,000 170,000 $375,000