Modified Equity Method
On December 31, 20X7, Randall Corporation recorded the following entry on its books to adjust from the fully adjusted equity method to the modified equity method for its investment in Sharp Company stock:
Investment in Sharp Company Stock | 11,000 |
|
Retained Earnings |
| 8,400 |
Income from Sharp Company |
| 2,600 |
Required
a. Adjust the data reported by Randall in the trial balance contained in Problem P6-34 for the effects of the preceding adjusting entry.
b. Prepare the journal entries that would have been recorded on Randall’s books during 20X7 under the modified adjusted equity method.
c. Prepare all eliminating entries needed to complete a consolidation worksheet at December 31, 20X7, assuming Randall has used the modified equity method.
d. Complete a three-part consolidation worksheet as of December 31, 20X7.
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