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Paris Company purchased an 80% investment in Seine, Inc. for $600,000 on January 1, 2019, when Seine had the following balance sheet: Accounts Receivable 50,000
Paris Company purchased an 80% investment in Seine, Inc. for $600,000 on January 1, 2019, when Seine had the following balance sheet: Accounts Receivable 50,000 Current liabilities 100,000 120,000 Inventory stock Common 50,000 Land 80,000 150,000 Retained Equipment 350,000 300,000 600,000 earnings 600,00 Assume that all assets and liabilities have market values equal to their book values. Any excess cost is attributed to goodwill. The following net incomes and dividends paid are reported by Seine: 2019 2018 Net income 80,000 90,000 Dividends paid10,000 10,000 A. Prepare the entries made by Paris to record the net income and dividends paid on its books for each year under the simple equity method B. Prepare the entries made by Paris to record the net income and dividends paid on its books for each year under the cost method
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