On January 1, 2021, Spark Corp

question 97

Essay

On January 1, 2021, 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 2021, Cranston reported net income of $100,000 and paid cash dividends of $30,000. Spark sold inventory costing $40,000 to Cranston during 2021 for $50,000. Cranston used all of this merchandise in its operations during 2021. 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 2021 to apply the equity method to this investment.

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Definitions:

Accounting Job

A position that involves managing financial records, preparing reports, and ensuring compliance with financial laws and regulations.

Personality Traits

Enduring characteristics that describe an individual's behavior, such as honesty, sociability, and humility.

Cancer Risk

The probability or likelihood of developing cancer over a certain period of time, influenced by genetic, environmental, and lifestyle factors.

Type A Personality

A personality type characterized by competitiveness, high ambition, impatience, and a sense of urgency, which is believed to be linked to a higher risk of heart disease.