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On January 1, 2017, Plutonium Corporation acquired 80% of the outstanding stock of Sulfurst Inc. for $287,900 cash. The following balance sheet shows Sulfurst Inc.s

On January 1, 2017, Plutonium Corporation acquired 80% of the outstanding stock of Sulfurst Inc. for $287,900 cash. The following balance sheet shows Sulfurst Inc.s book values immediately prior to acquisition, as well as the appraised values of its assets and liabilities by Plutoniums experts.

Sulfurst Inc.s Book Values Sulfurst Inc.s Market Values
Current assets $87,800 $87,800
Property, plant & equipment:
Land 81,500 102,400
Building & machinery (net) 169,200 169,200
Total assets $338,500
Total liabilities $95,000 $95,000
Common stock, $5 par value 93,800
Additional paid-in-capital 20,500
Retained earnings 129,200
Total liabilities and equities $338,500

Prepare the entry to be made on the books of Plutonium Corporation to record its investment in Sulfurst Inc. Assume that during the first two years after acquisition of Sulfurst Inc., Sulfurst reports the following changes in its retained earnings:

Retained earnings, January 1, 2017 $129,200
Net income, 2017 41,200
Less: dividends, 2017 (24,000 )
Net income, 2018 44,300
Less: dividends, 2018 (23,400 )
Retained earnings, December 31, 2018 $167,300

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(3) Plutonium uses the complete equity method to account for its investment in Sulfurst. Date Account Titles and Explanation Debit Credit 2017 (To record equity income (loss)) (To record dividend income) 2018 - (To record equity income (loss)) (To record dividend income)

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