Question
E47 Equity Entries With a Differential LO 41, 42 Pistol Corporation purchased 100 percent ownership of Scope Products on January 1, 20X6, for $56,000, at
E47Equity Entries With a Differential LO 41, 42
Pistol Corporation purchased 100 percent ownership of Scope Products on January 1, 20X6, for $56,000, at which time Scope Products reported retained earnings of $10,000 and capital stock outstanding of $30,000. The differential was attributable to patents with a life of eight years. Income and dividends of Scope Products were
| Year | Net Income | Dividends | ||
| 20X6 | $16,000 | $ 6,000 | ||
| 20X7 | 24,000 | 8,000 | ||
| 20X8 | 32,000 | 8,000 |
Required
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Give the equity method entries that Pistol should record to account for this investment in 20X6, 20X7, and 20X8.
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What is the balance of the Investment in Scope account on Pistol's balance sheet at December 31, 20X8, after all required equity method entries have been recorded?
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The Major Accounting Firms Understanding The Role Of Global Auditing Giants
Authors: Seth Nashe
1st Edition
B0CGKZ5Y2Q, 979-8859081318
