1 P3-29 Consolidated Worksheet and Balance Sheet on the Acquisition Date (Equity Method) LO 3-4, 3-5 10 points Paper Company acquired 90 percent of Scissor Company's outstanding common stock for $420.300 on January 1, 20x8, when the book value of Scissor's net assets was equal to $467000. Paper uses the equity method to account for investments. Trial balance data for Paper and Scissor as of January 1, 20x8, follow Paper Company Scissor Company Assets Cash $ 109,000 $ 20,000 Accounts Receivable 66,000 50,000 Inventory 132,000 99,000 Investment in scissor Company 420,100 Land 282,000 135,000 Buildings and Equipment 880,000 269,000 Accumulated Depreciation (430,000) Total Assets $1,459,100 5574.000 Liabilities and stockholders' Equity Accounts Payable $ 80,000 $ 22,000 Bonds Payable 232,000 85,00 Common Stock 612,000 232,000 Retained Earnings 55,300 235.ee Total Liabilities and Equity $1,459,100 5574,000 Required: a. Prepare the journal entry on Paper's books for the acquisition of Scissor Co. on January 1, 20X8. (if no entry is required for a transaction/event, select "No journal entry required in the first account feld) View rationist Journal entry worksheet Record the intial investment in sessor Co. Natal Date General Journal De Credit January b. Prepare a consolidation worksheet on the acquisition date, January 1 20X8. Assume the company prepares the optional Accumulated Depreciation Consolidation Entry. (Values in the first two columns (the parent" and "subsidiary balances that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.) Consolidated PAPER COMPANY AND SUBSIDIARY Consolidated Balance Sheet Worksheet January 1, 20x8 Consolidation Entries Paper Co. Scissor Co. DR CR Balance Sheet Assets Cash Accounts receivable Inventory Investment in Scissor Co Land Buildings and equipment Accumulated depreciation Total Assets Liabilities & Stockholders' Equity Accounts payable Bonds payable Common stock Retained earnings NCHI NA of Scissor Co Total Liabilities & Stockholders' Equity c. Prepare a consolidated balance sheet on the acquisition date, January 1, 20X8. (Amounts to be deducted should be indicated with a minus sign.) PAPER COMPANY AND SUBSIDIARY Consolidated Balance Sheet 11/2013 Assets Total Assets Liabilities & Stockholders' Equity Total Liabilities & Stockholders' Equity