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Pilfer Company acquired 90 percent ownership of Scrooge Corporation in 20X7, at underlying book value....

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Accounting

Pilfer Company acquired 90 percent ownership of Scrooge Corporation in 20X7, at underlying book value. On that date, the fair value of noncontrolling interest was equal to 10 percent of the book value of Scrooge Corporation. Pilfer purchased inventory from Scrooge for $90,000 on August 20, 20X8, and resold 70 percent of the inventory to unaffiliated companies on December 1, 20X8, for $100,000. Scrooge produced the inventory sold to Pilfer for $67,000. The companies had no other transactions during 20X8.

Based on the information given above, when the parent uses the equity method to record its investment in Scrooge Corporation, it would record investment income for the whole year at what dollar amount?

When the parent uses the equity method to adjust the inventory transaction, should the Parent debit or credit Investment Income?

debit or credit?

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