For the fiscal year ended March 31, 2006, Sable Company, the 80%-owned subsidiary of Pastel Corporation, had a net income of $600,000 and declared and paid dividends of $200,000. Fiscal Year 2006 depreciation and amortization of differences between current fair values and carrying amounts of Sable's identifiable net assets was $30,000; and Fiscal Year 2006 impairment of goodwill recognized in the business combination was $1,000.
Prepare journal entries for Pastel Corporation to record the Fiscal Year 2006 operating results of Sable Company under the:
a. Equity method of accounting
b. Cost method of accounting
Omit explanations for the journal entries and disregard income taxes.

Question

For the fiscal year ended March 31, 2006, Sable Company, the 80%-owned subsidiary of Pastel Corporation, had a net income of $600,000 and declared and paid dividends of $200,000. Fiscal Year 2006 depreciation and amortization of differences between current fair values and carrying amounts of Sable's identifiable net assets was $30,000; and Fiscal Year 2006 impairment of goodwill recognized in the business combination was $1,000. 
Prepare journal entries for Pastel Corporation to record the Fiscal Year 2006 operating results of Sable Company under the:
a. Equity method of accounting
b. Cost method of accounting
Omit explanations for the journal entries and disregard income taxes.

Quizplus · Accepted Answer

The Answer of For the fiscal year ended March 31, 2006, Sable Company, the 80%-owned subsidiary of Pastel Corporation, had a net income of $600,000 and declared and paid dividends of $200,000. Fiscal Year 2006 depreciation and amortization of differences between current fair values and carrying amounts of Sable's identifiable net assets was $30,000; and Fiscal Year 2006 impairment of goodwill recognized in the business combination was $1,000. 
Prepare journal entries for Pastel Corporation to record the Fiscal Year 2006 operating results of Sable Company under the:
a. Equity method of accounting
b. Cost method of accounting
Omit explanations for the journal entries and disregard income taxes.

For the Fiscal Year Ended March 31, 2006, Sable Company