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On the date of the business combination of Passman Corporation and Slago Company, the following...

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Accounting

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On the date of the business combination of Passman Corporation and Slago Company, the following working paper elimination was prepared (in journal entry format) PASSMAN CORPORATION AND SUBSIDIARY Working Paper Elimination January 31,2016 100,000 200,000 300,000 Common Stock Additional Paid-in Capital Retained Earnings Inventories- (first-in, first-out cost Plant Assets (net) Goodwill 50,000 150,000 40,000 Investment in Slago Company 840,000 Additional Information 1. On January 31, 2016, the remaining economic life of Sago's plant assets was 10 years, and Slago includes straight-line depreciation in operating expenses. 2. Goodwill was unimpaired on January 31, 2017 3. Slago declared and paid a dividend of $20,000 to Passman on January 31,2017 4. Slago had a net income of $90,000 for the fiscal year ended January 31, 2017 Instructions: Prepare journal entries for Passman Corporation to record the operating results of Slago Company for the year ended January 31, 2017, under the equity method of accounting. Omit explanations and disregard income taxes

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