Blake Corporation purchased 100 percent of the voting shares of Shaw Corporation on January 1, 20X3, at underlying book value. Blake uses the cost method in accounting for its investment in Shaw Corporation. Shaw Corporation 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:

\section*{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:

Blake Corporation Shaw Corporation Item Debit Credit Debit Credit Current Assets $145,000 $105.000 Depreciable Assets (net) 325,000 225.000 Investment in Shaw Corporation Stock 150.000 Depreciation Expense 25.000 15.000 Other Expenses 105,000 Dividends Declared 40,000 75,000 10.000 Current Liabilities $ 50.000 $ 40,000 Sales Long-Term Debt Common Stock Retained Earnings Dividend Income 100.000 120,000 200,000 100,000 230.000 50,000 200.000 120,000 10,000 $790,000 $790,000 $430,000 $430.000