chapter 5

b. Present all consolidation entries needed at December 31, 20X8, to prepare a complete set of consolidated financial statements for Purse Corporation and its subsidiary. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Purse Corporation acquired 70 percent of Scarf Corporation's ownership on January 1, 20X8, for $163,800. At that date, Scarf reported capital stock outstanding of $137,000 and retained earnings of $97,000, and the fair value of the noncontrolling interest was equal to 30 percent of the book value of Scarf. During 20X8, Scarf reported net income of $40,200 and comprehensive income of $46,200 and paid dividends of $35,200. Required: a. Present all equity- method entries that Purse would have recorded in accounting for its investment in Scarf during 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)