Assume that on 1/1/20 Grace acquired 80% of Smith for $440,000 when Smith's equity included $200,000 of retained earnings and $200,000 of capital stock. An appraisal of Smith's assets could not identify any misvalued assets. In 2020, Smith earned $100,000 and paid $30,000 of dividends. Grace uses the cost/initial value method to account for its investment in Smith. Assume that Grace is consolidating the trial balances of both companies on 12/31/20. What worksheet consolidation entries should be made?

Answer rating: 100% (QA)

In cost or initial value method the investment remains at initially recorded cost that is at 44000... View the full answer