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  3. on july 1, 2018, clearwater inc. purchased 7,250 s

On July 1, 2018, Clearwater Inc. purchased 7,250 shares of the outstanding common stock of...

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Accounting

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On July 1, 2018, Clearwater Inc. purchased 7,250 shares of the outstanding common stock of Mountain Corporation at a cost of $172,500. Clearwater will have significant influence over the financial and operating policles of Mountain. Mountain had 29,000 shares of outstanding common stock. Assume the total book value and fair value of net assets is $640,000. Both companies have a January through December fiscal year. The following data pertains to Mountain Corporation during 2018 Dividends declared and paid, Jan. 1-June 30 $11,900 Dividends declared and paid, Jul. 1-Dec. 31 $11,900 Net Income, January 1-June 30 Net Income, July 1-December 31 $13,900 $17,900 Required: 1. Prepare the entry to record the original investment in Mountain. 2. Compute the goodwill (if any) on the acquisition 3. Prepare the necessary entries (other than acquisition) for 2018 under the equity method. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3

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