Pure Company Acquired 80% of the Outstanding Common Stock of Saxxon

question 20

Essay

Pure Company acquired 80% of the outstanding common stock of Saxxon Company on January 2, 2016 for $675,000. At that time, Saxxon's total stockholders' equity amounted to $1,000,000. Saxxon Company reported net income and dividends for the last two years as follows: Required:
Prepare journal entries for Pure Company for 2016 and 2017 assuming Pure uses:
A. The cost method to record its investment
B. The complete equity method to record its investment. The difference between implied value and the book value of equity acquired was attributed solely to a building, with a 20-year expected life.

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Definitions:

Job Description

A formal account of an employee's responsibilities, duties, and the scope of their role within an organization.

Qualifications

The skills, experience, and education that make an individual suitable for a particular job or task.

You-attitude

A communication approach focusing on the audience's needs and interests, making messages more personal and engaging.

Prospecting Letter

A type of business letter written with the aim of introducing oneself to a potential client or employer, often to inquire about job opportunities or propose a business arrangement.