Assume Photo Corporation purchased 55 percent of the outstanding stock of Shutter Company (i.e., replace A75 percent@ with A55 percent@ in the first line of the problem). Also assume that Photo Corporation paid $385,000 cash for the stock instead of issuing $500,000 par bonds payable. On that date, the buildings and equipment have a remaining life of 10 years, the patent has a remaining life of 5 years, and the fair value of noncontrolling interest is $315,000. During 20X8, Shutter Company reported net income of $170,000 and paid dividends of $60,000. On December 31, 20X8, Shutter Corporation owed $9,000 on account to Photo Corporation and calculated that $15,000 of goodwill had been impaired. Part 1: Journalize the equity method entries to record the investment on the books of Photo Corporation during 20X8. Part 2: Journalize the elimination entries that would need to be prepared by Photo Corporation to report consolidated financial statements on December 31, 20X8. Hint: make sure you use the same account titles used by the two firms. For example, if you use Accounts Receivable in Elimination I that would result in a deduction because neither firm uses that account exact title
