Proud Company acquired 75 percent of Scarlet Company's outstanding common stock for $52.500 on January 1,...

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Proud Company acquired 75 percent of Scarlet Company's outstanding common stock for $52.500 on January 1, 2021, when the book value of Scarlet's net assets was equals to $70,000. Proud uses equity method for investments. Adjusted trial balance data for Proud and Scarlet as of December 31, 2021, are as follows: Cash Accounts Receivable Inventory Investment in Scarlet Land Buildings and equipment Cost of Goods Sold Depreciation Expense Selling and Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Scarlet Total Proud Company DB CR $25,000 16,675 19,000 59,250 25,000 170,500 33,500 4,325 28,000 8,000 $389,250 $56,500 27,300 65,000 62,500 85,000 83,200 9,750 $389,250 Scarlet Company DB b) Prepare Book Value calculation table (10 points) c) Prepare basic consolidation entry (35 points). d) Prepare accumulated depreciation consolidation entry (10 points). e) Prepare a consolidation worksheet for 2021 in good form (30 points). $8,500 6,000 12,000 27,450 58,000 15,500 3,500 17,500 4,000 $152,450 $16,600 6,350 10,000 50,000 20,000 49,500 $152,450 a) Prepare the journal entries on Proud's books for the acquisition of Scarlet on January 1, 2021 and entries related to the investment in Scarlet Company during 2021 (15 points). Proud Company acquired 75 percent of Scarlet Company's outstanding common stock for $52.500 on January 1, 2021, when the book value of Scarlet's net assets was equals to $70,000. Proud uses equity method for investments. Adjusted trial balance data for Proud and Scarlet as of December 31, 2021, are as follows: Cash Accounts Receivable Inventory Investment in Scarlet Land Buildings and equipment Cost of Goods Sold Depreciation Expense Selling and Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Scarlet Total Proud Company DB CR $25,000 16,675 19,000 59,250 25,000 170,500 33,500 4,325 28,000 8,000 $389,250 $56,500 27,300 65,000 62,500 85,000 83,200 9,750 $389,250 Scarlet Company DB b) Prepare Book Value calculation table (10 points) c) Prepare basic consolidation entry (35 points). d) Prepare accumulated depreciation consolidation entry (10 points). e) Prepare a consolidation worksheet for 2021 in good form (30 points). $8,500 6,000 12,000 27,450 58,000 15,500 3,500 17,500 4,000 $152,450 $16,600 6,350 10,000 50,000 20,000 49,500 $152,450 a) Prepare the journal entries on Proud's books for the acquisition of Scarlet on January 1, 2021 and entries related to the investment in Scarlet Company during 2021 (15 points).

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