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Pirate Corporation purchased 100 percent ownership of Ship Company on January 1, 20X5, for $271,000. On that date, the book value of Ship's reported
Pirate Corporation purchased 100 percent ownership of Ship Company on January 1, 20X5, for $271,000. On that date, the book value of Ship's reported net assets was $203,000. The excess over book value paid is attributable to depreciable assets with a remaining useful life of 5 years. Net income and dividend payments of Ship in the following periods were as shown below: Year Net Income Dividends 20x5 $34,000 $10,000 ok 20X6 20X7 54,000 34,000 20,000 54,000 nces Required: Prepare journal entries on Pirate Corporation's books relating to its investment in Ship Company for each of the three years, assuming it accounts for the investment using the equity method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet
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