Part A: (3 marks)

For the fiscal year ended March 31, 2020, X Company, the 80%-owned subsidiary of Y Corporation, had a net income of $600,000 and declared and paid dividends of $200,000. Fiscal Year 2020 depreciation and amortization of differences between current fair values and carrying amounts of Xs identifiable net assets was $30,000; and Fiscal Year 2020 impairment of goodwill recognized in the business combination was $1,000.

Instructions:

Prepare journal entries for Y Corporation to record the Fiscal Year 2020 operating results of X Company under the equity method.