On January 1,2008,Spark Corp.acquired a 40% interest in Cranston Inc.for $250,000.On that date,Cranston's balance sheet disclosed net assets of $430,000.During 2008,Cranston reported net income of $100,000 and paid cash dividends of $30,000.Spark sold inventory costing $40,000 to Cranston during 2008 for $50,000.Cranston used all of this merchandise in its operations during 2008.Any excess cost over fair value is attributable to an unamortized trademark with a 20 year remaining life.
Required:
Prepare all of Spark's journal entries for 2008 to apply the equity method to this investment.

Question

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The Answer of On January 1,2008,Spark Corp.acquired a 40% interest in Cranston Inc.for $250,000.On that date,Cranston's balance sheet disclosed net assets of $430,000.During 2008,Cranston reported net income of $100,000 and paid cash dividends of $30,000.Spark sold inventory costing $40,000 to Cranston during 2008 for $50,000.Cranston used all of this merchandise in its operations during 2008.Any excess cost over fair value is attributable to an unamortized trademark with a 20 year remaining life.
Required:
Prepare all of Spark's journal entries for 2008 to apply the equity method to this investment.