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Pirate Corporation purchased 100 percent ownership of Ship Company on January 1, 20X5, for $289,000. On that date, the book value of Ship's reported net assets was $218,000. The excess over book value paid is attributable to depreciable assets with a remaining useful life of 5 years. Net income and dividend payments of Ship in the following periods were as shown below: Year 20X5 Net Income $ 26,000 Dividends. 20X6 20X7 46,000 26,000 $ 11,000 21,000 52,000 4 Required: Prepare journal entries on Pirate Corporation's books relating to its investment in Ship Company for each of the three years, assuming It accounts for the Investment using the equity method. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 9 10 > Record the purchase of Ship Company for 20X5. Note: Enter debits before credits. Event General Journal Debit Credit

Pirate Corporation purchased 100 percent ownership of Ship Company on January 1, 20X5, for $289,000. On that date, the book value of Ship's reported net assets was $218,000. The excess over book value paid is attributable to depreciable assets with a remaining useful life of 5 years. Net income and dividend payments of Ship in the following periods were as shown below: Year 20X5 Net Income $ 26,000 Dividends. 20X6 20X7 46,000 26,000 $ 11,000 21,000 52,000 4 Required: Prepare journal entries on Pirate Corporation's books relating to its investment in Ship Company for each of the three years, assuming It accounts for the Investment using the equity method. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 9 10 > Record the purchase of Ship Company for 20X5. Note: Enter debits before credits. Event General Journal Debit Credit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pirate Corporation purchased 100 percent ownership of Ship Company on January 1, 20X5, for $289,000. On that date, the book value of Ship's reported net assets was $218,000. The excess over book value paid is attributable to depreciable assets with a remaining useful life of 5 years. Net income and dividend payments of Ship in the following periods were as shown below: Dividends Year 20X5 Net Income $ 26,000 ed 20X6 20X7 46,000 $ 11,000 21,000 26,000 52,000 R ok ences Required: Prepare journal entries on Pirate Corporation's books relating to its investment in Ship Company for each of the three years, assuming it accounts for the investment using the equity method. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Ic raw View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 9 10 > Record the purchase of Ship Company for 20X5. Note: Enter debits before credits. Event General Journal Debit Credit < Prev 1 of 1 Next >
Transcribed Image Text:Pirate Corporation purchased 100 percent ownership of Ship Company on January 1, 20X5, for $289,000. On that date, the book value of Ship's reported net assets was $218,000. The excess over book value paid is attributable to depreciable assets with a remaining useful life of 5 years. Net income and dividend payments of Ship in the following periods were as shown below: Dividends Year 20X5 Net Income $ 26,000 ed 20X6 20X7 46,000 $ 11,000 21,000 26,000 52,000 R ok ences Required: Prepare journal entries on Pirate Corporation's books relating to its investment in Ship Company for each of the three years, assuming it accounts for the investment using the equity method. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Ic raw View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 9 10 > Record the purchase of Ship Company for 20X5. Note: Enter debits before credits. Event General Journal Debit Credit < Prev 1 of 1 Next >
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