Cost Method
The trial balance data presented in Problem P7-33 can be converted to reflect use of the cost method by inserting the following amounts in place of those presented for Prime Company:
Investment in Lane Company Stock | $160,000 |
Retained Earnings | 348,000 |
Income from Subsidiary | -0- |
Dividend Income | 28,000 |
Required
a.Prepare the journal entries that would have been recorded on Prime’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 Prime has used the cost method.
c.Complete a three-part consolidation worksheet as of December 31, 20X7.
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