On January 1,2008,Spark Corp

question 14

Essay

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.

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Definitions:

Aggressive Impulses

Innate or developed urges to act or react in a forceful or hostile manner towards others or oneself.

Growth-Inhibiting Environment

A setting or condition that restricts or hinders the development and progress of an organism or process.

Unconditional Positive Regard

Accepting and supporting someone regardless of what they say or do, as proposed by Carl Rogers in his client-centered therapy.

Aggressive

Exhibiting forceful actions or behavior, often with the intent to dominate or control.