Autumn Corporation acquired 90 percent of the stock of Spring Company on January 1, 20X2, for $360,000. At that date, the fair value of the noncontrolling interest was $40,000. Spring's balance sheet contained the following amounts at the time of the combination:
During each of the next three years, Spring reported net income of $70,000 and paid dividends of $20,000. On January 1, 20X4, Autumn sold 3,000 shares of Spring's $5 par value shares for $90,000 in cash. Autumn used the fully adjusted equity method in accounting for its ownership of Spring Company.
-Based on the preceding information,in the journal entry recorded by Autumn for the sale of shares

Question

Autumn Corporation acquired 90 percent of the stock of Spring Company on January 1, 20X2, for $360,000. At that date, the fair value of the noncontrolling interest was $40,000. Spring's balance sheet contained the following amounts at the time of the combination:
  During each of the next three years, Spring reported net income of $70,000 and paid dividends of $20,000. On January 1, 20X4, Autumn sold 3,000 shares of Spring's $5 par value shares for $90,000 in cash. Autumn used the fully adjusted equity method in accounting for its ownership of Spring Company.
-Based on the preceding information,in the journal entry recorded by Autumn for the sale of shares

Quizplus · Accepted Answer

The investment in Spring Stock is credited for $75,000, which is the original cost of the shares sold.

Autumn Corporation Acquired 90 Percent of the Stock of Spring