Worksheet, blocks, control with first block, merchandise sales (80%, price $275,000, yr 2015 only)

Net income and dividends for two years for Craft Company are as follows:

20152016

Net income for year .............................................. $60,000 $90,000

Dividends, declared in December ................................... 20,000 30,000

In 2016, the net income of Craft from January 1 through April 30 is $30,000. On January 1, 2015, the only tangible asset of Craft that is undervalued is equipment, which is worth $20,000 more than book value. The equipment has a remaining life of four years, and straight-line depreciation is used. Any remaining excess is goodwill.

instructions:

James Company carries the investment in Craft Company under the simple equity method. In general journal form, record the entries that would be made to apply the equity method in 2015

Complete the work sheet for consolidated financial statements for 2015.

Operating Expenses Subsidiary Income. Dividends Declared. Totals \begin{tabular}{rr} 121,000 & 100,000 \\ & \\ 50,000 & 30,000 \\ & 0 \\ \hline \hline \end{tabular} Operating Expenses Subsidiary Income. Dividends Declared. Totals \begin{tabular}{rr} 121,000 & 100,000 \\ & \\ 50,000 & 30,000 \\ & 0 \\ \hline \hline \end{tabular}