Blake Corporation purchased 100 percent of Shaw Corporation's voting shares on January 1, 20X3, at underlying book value. Blake uses the cost method in accounting for its investment in Shaw. Shaw's retained earnings, as shown in the 20X3 trial balance, was $50,000 on January 1, 20X3. On December 31, 20X3, the trial balance data for the two companies are as follows:

Required 

a. Give all eliminating entries needed to prepare a three-part consolidation workpaper as of December 31, 20X3. 

b. Prepare the workpaper in good form.

Transcribed Image Text:

Item Current Assets Depreciable Assets (net) Investment in Shaw Corporation Stock Depreciation Expense Other Expenses Dividends Declared Current Liabilities Long-Term Debt Common Stock Retained Earnings Sales Dividend Income Blake Corporation Debit Credit $170,000 300,000 150,000 25,000 250,000 20,000 $915,000 $ 30,000 100,000 200,000 270,000 300,000 15,000 $915,000 Shaw Corporation Debit Credit $110,000 210,000 15,000 160,000 15,000 $510,000 $ 20,000 120,000 100,000 70,000 200,000 $510,000