Question

The trial balance data presented in 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
Beginning Retained Earnings......... 348,000
Income from Subsidiary............. 0
Dividend Income............... 28,000
In P7-33



Required
a. Prepare the journal entries that would have been recorded on Prime’s books during 20X7 under the cost method.
b. Prepare all elimination 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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  • CreatedMay 23, 2014
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