During 2009, Jackson reported net income of $96,000 while paying dividends of $12,000. During 2010, Jackson reported net income of $132,000 while paying dividends of $36,000. Assume that Matthews Co. acquired the common stock of Jackson Co. for $588,000 in cash and properly accounted for this acquisition under the acquisition method. As of January 1, 2009, Jackson’s land had a fair value of $102,000, its buildings were valued at $188,000 and its equipment was appraised at $216,000. Any excess of consideration transferred over fair value of assets and liabilities acquired is due to an unamortized patent to be amortized over 10 years. Matthews decided to use the equity method for this investment.Required:1 Prepare the S, A, I, D and E worksheet entries for December 31, 2009.2 Prepare the S, A, I, D and E worksheet entries for December 31, 2010.
During 2009, Jackson reported net income of $96,000 while paying dividends of $12,000. During 2010, Jackson reported net income of $132,000 while…
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