The Investment in Sark Company Common Stock ledger account of Poulter Corporation was as follows for the year ended December 31, 2006:
Poulter had acquired 80% of the outstanding common stock of Sark on December 31, 2005 in a business combination.
For the fiscal year ended December 31, 2006, Poulter had total revenue (excluding intercompany investment income) of $800,000, and total costs and expenses (including goodwill impairment loss) of $600,000. Poulter declared cash dividends of $60,000 during 2006.
a. Reconstruct Poulter Corporation's equity-method journal entries for the operations of Sark Company for 2006. Omit explanations and disregard income taxes.
b. Prepare Poulter Corporation's closing entries on December 31, 2006. Omit explanations.

Question

The Investment in Sark Company Common Stock ledger account of Poulter Corporation was as follows for the year ended December 31, 2006:
  Poulter had acquired 80% of the outstanding common stock of Sark on December 31, 2005 in a business combination.
For the fiscal year ended December 31, 2006, Poulter had total revenue (excluding intercompany investment income) of $800,000, and total costs and expenses (including goodwill impairment loss) of $600,000. Poulter declared cash dividends of $60,000 during 2006.
a. Reconstruct Poulter Corporation's equity-method journal entries for the operations of Sark Company for 2006. Omit explanations and disregard income taxes.
b. Prepare Poulter Corporation's closing entries on December 31, 2006. Omit explanations.

Quizplus · Accepted Answer

The Answer of The Investment in Sark Company Common Stock ledger account of Poulter Corporation was as follows for the year ended December 31, 2006:
  Poulter had acquired 80% of the outstanding common stock of Sark on December 31, 2005 in a business combination.
For the fiscal year ended December 31, 2006, Poulter had total revenue (excluding intercompany investment income) of $800,000, and total costs and expenses (including goodwill impairment loss) of $600,000. Poulter declared cash dividends of $60,000 during 2006.
a. Reconstruct Poulter Corporation's equity-method journal entries for the operations of Sark Company for 2006. Omit explanations and disregard income taxes.
b. Prepare Poulter Corporation's closing entries on December 31, 2006. Omit explanations.

The Investment in Sark Company Common Stock Ledger Account of Poulter