Paper Company acquired 90 percent of Scissor Companys outstanding common stock for $391,500 on January 1, 20X8, when the book value of Scissors net assets was equal to $435,000. Paper uses the equity method to account for investments. Trial balance data for Paper and Scissor as of January 1, 20X8, follow:

	Paper Company					Scissor Company
Assets
Cash		$	128,000				$	34,000
Accounts Receivable			80,000					46,000
Inventory			125,000					105,000
Investment in Scissor Company			391,500
Land			286,000					130,000
Buildings and Equipment			877,000					252,000
Accumulated Depreciation			(434,000	)				(20,000	)
Total Assets		$	1,453,500				$	547,000
Liabilities and Stockholders Equity
Accounts Payable		$	81,000				$	26,000
Bonds Payable			231,000					86,000
Common Stock			606,000					231,000
Retained Earnings			535,500					204,000
Total Liabilities and Equity		$	1,453,500				$	547,000

Required: a. Prepare the journal entry on Papers books for the acquisition of Scissor Co. on January 1, 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Prepare a consolidation worksheet on the acquisition date, January 1, 20X8. Assume the company prepares the optional Accumulated Depreciation Consolidation Entry. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)

c. Prepare a consolidated balance sheet on the acquisition date, January 1, 20X8. (Amounts to be deducted should be indicated with a minus sign.)

Journal entry worksheet