Explore BrainMass
Share

Make all of Ruark's journal entries for 2004 to apply the equity method to this investment

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

On January 1, 2004, Ruark Corporation acquired a 40 percent interest in Batson, Inc., for $210,000. On that date, Batson's balance sheet disclosed net assets of $360,000. During 2004, Batson reported net income of $80,000 and paid cash dividends of $25,000. Ruark sold inventory costing $30,000 to Batson during 2004 for $40,000. Batson used all of this merchandise in its operations during 2004.
Make all of Ruark's journal entries for 2004 to apply the equity method to this investment.

Attached spreadsheet contains your details. Thanks for the help!!

© BrainMass Inc. brainmass.com March 21, 2019, 1:54 pm ad1c9bdddf
https://brainmass.com/business/the-accounting-cycle/equity-method-journal-entries-108850

Attachments

Solution Preview

(Equity entries for one year, includes intercompany transfers but no unearned gain)

Purchase Price of Batson Stock $210,000
Book Value of Batson Stock ($360,000 x 40%) (144,000)
Goodwill $66,000 ...

Solution Summary

A detailed solution is provided.

$2.19