For the Fiscal Year Ended March 31, 2006, Sable Company

Essay

For the fiscal year ended March 31, 2006, Sable Company, the 80%-owned subsidiary of Pastel Corporation, had a net income of $600,000 and declared and paid dividends of $200,000. Fiscal Year 2006 depreciation and amortization of differences between current fair values and carrying amounts of Sable's identifiable net assets was $30,000; and Fiscal Year 2006 impairment of goodwill recognized in the business combination was $1,000.
Prepare journal entries for Pastel Corporation to record the Fiscal Year 2006 operating results of Sable Company under the:
a. Equity method of accounting
b. Cost method of accounting
Omit explanations for the journal entries and disregard income taxes.