Nitro Corporation purchased an 80% interest in Mars Company on January 1, 20X5. The following determination and distribution of excess schedule was prepared on the purchase date: Price paid for investment in Mars $160,000 Less book value of interest purchased: Common stock $24,000 Paid in capitalin excess of par 41,600 Retained earnings 93.400 Total stockholder's equity $159,000 Ownership interest 80% Excess of cost over book Adjustments: Equipment (80%x$20,000) (8-year amortization, $2,000 per year) Dr. Goodwill Total adjustments $16,000 16,000 Dr. Income and dividends for Mars Company dur20X5 and 20X6 were as follows: Income Dividends 20x5 $45,000 12,000 20x6 $52,000 18,000 Instructions 1.Complete the following entries on the books of Mars Company under each of the methods indicated. (A) (B) Simple Sophisticated Equity Method Equity Method (C) Cost Method 2005 Investment in Mars Company To record investment in Mars Company Cash__ Subsidiary income of Investment in Mars Company $45,000 reported to parent Subsidiary income Dividends of $12.000 Cash paid by Mars I nvestment in Mars Company 20X6 Subsidiary income of Investmentin Mars Company $52,000 reported to Subsidiary income_ parent 7 Nitro Corporation purchased an 80% interest in Mars Company on January 1, 20X5. The following determination and distribution of excess schedule was prepared on the purchase date: Price paid for investment in Mars $160,000 Less book value of interest purchased: Common stock $24,000 Paid in capitalin excess of par 41,600 Retained earnings 93.400 Total stockholder's equity $159,000 Ownership interest 80% Excess of cost over book Adjustments: Equipment (80%x$20,000) (8-year amortization, $2,000 per year) Dr. Goodwill Total adjustments $16,000 16,000 Dr. Income and dividends for Mars Company dur20X5 and 20X6 were as follows: Income Dividends 20x5 $45,000 12,000 20x6 $52,000 18,000 Instructions 1.Complete the following entries on the books of Mars Company under each of the methods indicated. (A) (B) Simple Sophisticated Equity Method Equity Method (C) Cost Method 2005 Investment in Mars Company To record investment in Mars Company Cash__ Subsidiary income of Investment in Mars Company $45,000 reported to parent Subsidiary income Dividends of $12.000 Cash paid by Mars I nvestment in Mars Company 20X6 Subsidiary income of Investmentin Mars Company $52,000 reported to Subsidiary income_ parent 7