On January 1, 2011, Spark Corp

question 57

Essay

On January 1, 2011, 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 2011, Cranston reported net income of $100,000 and paid cash dividends of $30,000. Spark sold inventory costing $40,000 to Cranston during 2011 for $50,000. Cranston used all of this merchandise in its operations during 2011. 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 2011 to apply the equity method to this investment.

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Definitions:

Sildenafil

A pharmaceutical drug primarily used to treat erectile dysfunction and pulmonary arterial hypertension by increasing blood flow to the penis and relaxing blood vessel walls.

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High-fat Meal

A meal consisting of foods that are rich in fats, which can affect the body's metabolism and heart health.

Compromised Human Dignity

A state or situation in which an individual's respect, self-worth, and privacy are diminished or violated.