Cost Method
The trial balance data presented in Problem P6-34 can be converted to reflect use of the cost method by inserting the following amounts in place of those presented for Randall Corporation:
Investment in Sharp Company Stock | $280,000 |
Retained Earnings | 329,900 |
Income from Subsidiary | −0− |
Dividend Income | 20,000 |
Required
a. Prepare the journal entries that would have been recorded on Randall’s books during 20X7 under the cost method.
b. Prepare all eliminating entries needed to complete a consolidation worksheet as of December 31, 20X7, assuming Randall uses the cost method.
c. Complete a three-part consolidation worksheet as of December 31, 20X7.
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