Nitro Corporation purchased 80% interest in Mars Company on January 1, 2018. The following determination and distribution of escess was prepared on the purchased date
Price paid for investment in Mars		$160,000
Less book value of interest purchased:
Common stock	$24,000
Paid-in-capital in excess of par	41,600
Retained earnings	93,400
Total stockholder's equity	159,000
Ownership interest	80%	127,200
Excess of cost over book		$32,800
Adjustments
Equipment (80%x$20,000)
(8-year amortization, $2,000 per year)		$16,000 Dr.
Goodwill		16,000 Dr.
Total adjustments		$32,800
Income and dividends for Mars Company during 2018 and 2019 were as follows:
	2018	2019
Income	$45,000	$52,000
Dividends	12,000	18,000
Instructions
Complete the following entries on the books of Mars Company under each methods indicated
Event		Simple Equity Method	Sophisticated Equity Method	Cost Method
2018 To record investment in Mars Company	Investment in Mars Company Cash_________________
Subsidiary income of $45,000 reported to parent	Investment in Mars Company Subsidiary income_________
Dividends of $12,000 paid by Mars	Cash___________________ Investment by Mars
2019 Subsidiary income of $52,000 reported to parent	Investment in Mars Company Subsidiary income_________
Dividends of $18,000 paid by Mars	Cash___________________ Investment by Mars

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Nitro Corporation purchased 80% interest in Mars Company on January 1, 2018. The following determination and distribution of escess was prepared on the purchased dale $160,000 4 Price paid for investment in Mars 5 Less book value of interest purchased 6 Common stock 7 Paid in capital in excess of par 8 Retained earnings 9 Total Stockhoker's equity 10 Ownership interest 11 Excess of cost over book $24,000 41,600 93 600 159,000 30% 127 200 $12.500 13 Austents 14 Equipment (80% $20,000) 15 (8-year amortuation 52 000 per year) to Goodwill 17 Total adjustments $16.000 DI 16 000 Dr $12.800 19 Income and dividends for Mars Company during 2015 and 2019 were as follows 2018 2019 21 Income $45 000 $52.000 22 D ends 12 000 18.000 Case 1 I Type here to search 0 W E R T Y A S D F G H I AZ : X & for 24 Instructions 25 Complete the following entries on the books of Mars Company under each methods indicated 26 Simple Sophisticated Cost 27 Event Equity Method Equity Method Method 2018 Investment in Mars To record investment in Mars Company 28 Company Cash Investment in Mars Company Subsidiary income of Subsidiary 29 $45,000 reported to parent income Cash 30 Dividends of $12,000 paid by Mars Investment by Mars Investment in Mars 2019 Company Subsidiary income of Subsidiary 31 $52,000 reported to parent income Cash 32 Dividends of $18,000 paid by Mars Investment by Mars Case 8.1 READY Nitro Corporation purchased 80% interest in Mars Company on January 1, 2018. The following determination and distribution of escess was prepared on the purchased dale $160,000 4 Price paid for investment in Mars 5 Less book value of interest purchased 6 Common stock 7 Paid in capital in excess of par 8 Retained earnings 9 Total Stockhoker's equity 10 Ownership interest 11 Excess of cost over book $24,000 41,600 93 600 159,000 30% 127 200 $12.500 13 Austents 14 Equipment (80% $20,000) 15 (8-year amortuation 52 000 per year) to Goodwill 17 Total adjustments $16.000 DI 16 000 Dr $12.800 19 Income and dividends for Mars Company during 2015 and 2019 were as follows 2018 2019 21 Income $45 000 $52.000 22 D ends 12 000 18.000 Case 1 I Type here to search 0 W E R T Y A S D F G H I AZ : X & for 24 Instructions 25 Complete the following entries on the books of Mars Company under each methods indicated 26 Simple Sophisticated Cost 27 Event Equity Method Equity Method Method 2018 Investment in Mars To record investment in Mars Company 28 Company Cash Investment in Mars Company Subsidiary income of Subsidiary 29 $45,000 reported to parent income Cash 30 Dividends of $12,000 paid by Mars Investment by Mars Investment in Mars 2019 Company Subsidiary income of Subsidiary 31 $52,000 reported to parent income Cash 32 Dividends of $18,000 paid by Mars Investment by Mars Case 8.1 READY