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E4-9 Equity Entries with Goodwill LO 4-1, 4-2...

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E4-9 Equity Entries with Goodwill LO 4-1, 4-2 Turner Corporation reported the following balances at January 1, 20X9: Item Book Value Fair Value Cash $ 45,000 $ 45,000 Accounts Receivable 70,000 70,000 Inventory 117,000 133,000 Buildings and Equipment 306,000 251,000 Less: Accumulated Depreciation (164,000 ) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total Assets $ 374,000 $ 499,000 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Accounts Payable $ 73,000 $ 73,000 Common Stock ($10 par value) 90,000 Additional Paid-In Capital 22,000 Retained Earnings 189,000 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total Liabilities and Equities $ 374,000 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- On January 1, 20X9, Gross Corporation purchased 100 percent of Turner's stock. All tangible assets had a remaining economic life of 5 years at January 1, 20X9. Both companies use the FIFO inventory method. Turner reported net income of $33,000 in 20X9 and paid dividends of $4,600. Gross uses the equity method in accounting for its investment in Turner. Required: Prepare all journal entries that Gross recorded during 20X9 with respect to its investment assuming Gross paid $465,000 for the ownership of Turner on January 1, 20X9. The amount of the differential assigned to goodwill is not impaired. I just need journal entries for the following: Record purchase of Turner stock. Record dividend from Turner. Record equity-method income. Record differential assigned to inventory carried on FIFO basis. Record amortization differential assigned to building and equipment.

 

Paper#1972 | Written in 18-Jul-2015

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