The trial balance data presented in Problem P6-34 can be converted to reflect use of the cost method by inserting the following amounts in place of those presented for Randall Corporation:

Investment in Sharp Company Stock...... $280,000

Retained Earnings.............. 329,900

Income from Subsidiary............ 0

Dividend Income.............. 20,000

In P6-34

Required
a. Prepare the journal entries that would have been recorded on Randall'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 Randall uses the cost method.
c. Complete a three-part consolidation worksheet as of December 31,20X7.

Fran Corporation Brey Inc. Dr (Cr) (3,800,000) (1,500,000) Income Statement Dr (Cr) Net Sales Income from Brey Gain on Sale of Warehouse Cost of Goods Sold Operating Expenses (including depreciation) Net Income (128,000) (30,000) 2,360,000 1,100,000 $ (498.000 870,000 440,000 (190.000) Retained Earnings Statement Balance, 1/1/x9 Net Income Dividends Paid S (440,000) (498,000) (156,000) (190,000) 40,000 Balance, 12/31X9 (938.000) (306.000 Balance Sheet Assets: Lash Accounts Receivable (net) Inventories Land, Plant, & Equipment Accumulated Depreciation Investment in Brey S 570,000 860,000 1,060,000 1,320,000 (370,000) 838,000 S 4,278,000 $ 150,000 350,000 410,000 680,000 (210,000) Total Assets 1,380,000 Liabilities & Stockholders Equity Accounts Payable & Accrued Expenses Common Stock Additional Paid-in Capital Retained Earnings (594,000) (400,000) (306,000) S4.278,000) (1.380,000) (1,340,000) (1,700,000) (300,000) (973,000) (80,000) Total Liabilities & Equity