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