On January 1, 2018, Spark Corp

question 35

Essay

On January 1, 2018, 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 2018, Cranston reported net income of $100,000 and paid cash dividends of $30,000.Spark sold inventory costing $40,000 to Cranston during 2018 for $50,000.Cranston used all of this merchandise in its operations during 2018.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 2018 to apply the equity method to this investment.

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Definitions:

Andrew Jackson

The seventh President of the United States (1829–1837), known for his populist policies, but also for his role in the Indian Removal Act, which led to the Trail of Tears.

Fugitive Slaves

Escaped slaves seeking freedom from bondage, who were often subject to laws compelling their return to enslavement.

Transportation Infrastructure

The framework of facilities and systems that support the movement of people and goods, including roads, bridges, railways, ports, airports, and public transit.

Foreign Investors

Individuals or companies from one country investing capital in businesses, real estate, or other assets in another country.