Carnes Co Decided to Use the Partial Equity Method to Account

question 116

Essay

Carnes Co. decided to use the partial equity method to account for its investment in Domino Corp. An unamortized trademark associated with the acquisition was $30,000, and Carnes decided to amortize the trademark over ten years. For 2013, Carnes' Equity in Subsidiary Earnings was $78,000.
Required:
What balance would have been in the Equity in Subsidiary Earnings account if Carnes had used the equity method?

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Definitions:

Merchandise Inventory

Goods or products that a company holds for the purpose of sale to customers in the ordinary course of business.

Capital

Financial assets or resources owned by an individual or organization, particularly those used to generate income or investment.

Adjusting Journal Entries

Journal entries that are needed in order to update specific ledger accounts to reflect correct balances at the end of an accounting period.

Worksheet

A tool used in accounting to consolidate all of the financial information and to prepare adjusting entries and financial statements.