Paper Company acquired 100 percent of Scissor Companys outstanding common stock for $370,000 on January 1, 20X8,

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. Problem 2-25 summarizes the first year of Paper’s ownership of Scissor. 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:

.
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 in goodform.

Transcribed Image Text:

Paper Company Scissor Company Debit Credit Debit Credit $232,000 165,000 193,000 515,000 250,000 875,000 $278,000 65,000 312,000 90.000 $116,000 97,000 115,000 Accounts Receivable Investment in Scissor Stock Buildings & Equipment Cost of Goods Sold Depreciation Expense Selling & Administrative Expense Dividends Declared 125,000 250,000 $178,000 12,000 58,000 30.000 Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings $ 630,000 85,000 150,000 625,000 498,000 880,000 107,000 S 48,000 40,000 100,000 250,000 188,000 355,000 Income from Scissor Total $2,975,000 $2,975,000 $981,000 $981,000