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Business, 04.07.2020 02:01 alanihuling

Paper Company acquired 100 percent of Scissor Company's outstanding common stock for $370,000 on January 1, 20X8, when the book value of Scissor's net assets was equal to $370,000. Accumulated depreciation on this date was $24,000. Paper uses the equity method to account for investments. The following trial balance summarizes the financial position and operations for Paper and Scissor as of December 31, 20X9: (Assume the company prepares the optional Accumulated Depreciation Elimination Entry.) Paper Company Scissor Company
Debit Credit Debit Credit
Cash $323,000 $116,000
Accounts Receivable 165,000 97,000
Inventory 193,000 115,000
Investment in Scissor Stock 515,000 0
Lad 250,000 125,000
Buildings and equipment 875,000 250,000
Cost of Goods Sold 278,000 178,000
Depreciation Expense 65,000 12,000
Selling & Administrative Expense 312,000 58,000
Dividends Declared 90,000 30,000
Accumulated Depreciation $630,000 $48,000
Accounts Payable 85,000 40,000
Bonds Payable 150,000 100,000
Common Stock 625,000 250,000
Retained Earnings 498,000 188,000
Sales 880,000 355,000
Income from Scissor 107,000 0
Total $2,975,000 $2,975,000 $981,000 $981,000
Required: a. Prepare any equity method journal entry(ies) related to the investment in Scissor Company during 20X9.

b. Prepare a consolidation worksheet for 20X9

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