The trial balance data presented in P8–24 can be converted to reflect use of the cost method by inserting the following amounts in place of those presented for Bennett Corporation:
Investment in Stone Container Stock ... $ 75,000
Retained Earnings........... 187,200
Income from Subsidiary........ 0
Dividend Income............ 6,000
Stone reported retained earnings of $25,000 on the date Bennett purchased 60 percent of the stock.
In P8–24

a. Prepare the journal entries that would have been recorded on Bennett’s books during 20X4 under the cost method.
b. Prepare all elimination entries needed to complete a consolidation worksheet as of December 31, 20X4, assuming Bennett uses the cost method.
c. Complete a three-part consolidation worksheet as of December 31,20X4.

  • CreatedMay 23, 2014
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