On December 31, 20X7, Prime Company recorded the following entry on its books to adjust its investment in Lane Company from the basic equity method to the fully adjusted equity method:

\section*{Required}

a. Adjust the data reported by Prime Company in the trial balance contained in Problem 6-35 for the effects of the adjusting entry presented above.

b. Prepare the joumal entries that would have been recorded on the books of Prime Company during \(20 \times 7\) if it had always used the fully adjusted equity method.

c. Prepare all eliminating entries needed to complete a consolidation workpaper as of December 31. 20X7, assuming Prime has used the fully adjusted equity method.

d. Complete a three-part consolidation workpaper as of December 31, 20X7.

Transcribed Image Text:

Retained Earnings 26,000 Income from Subsidiary 2.000 Investment in Lane Company Stock 24,000