**ONLY NEED PART C** Exercise 4-11 On January 1, 2017, Plutonium Corporation acq
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Question
**ONLY NEED PART C**
Exercise 4-11 On January 1, 2017, Plutonium Corporation acquired 80% of the outstanding stock of Sulfurst Inc. for $246,400 cash. The following balance sheet shows Sulfurst Inc.'s book values immediately prior to acquisition, as well as the appraised values of its assets and liabilities by Plutonium's experts Sulfurst Inc.'s Book Values Sulfurst Inc Market Values Current assets $91,000 $91,000 Property, plant & equipment 75,000 178,600 $344,600 $104,900 97,400 20,000 122,300 $344,600 95,100 178,600 Land Building & machinery (net) Total assets Total liabilities Common stock, $5 par value Additional paid-in-capital Retained earnings Total liabilities and equities $104,900Explanation / Answer
Solution:
c) Preparing the Journal Entries Under each of the Following Methods to Record the Information on the books of Plutonium Corportation for the years 2017 and 2018,
1. Plutonium uses the cost method to account for its investment in Sulfurst:
2. Plutonium uses the partial equity method to account for its investment in Sulfurst:
3. Plutonium uses the complete equity method to account for its investment in Sulfurst:
Date Account Title and Explanation Debit Credit 2017 Cash $20,640 Dividend Income ($25,800 * 80%) $20,640 2018 Cash $16,720 Dividend Income ($20,900 * 80%) $16,720Related Questions
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