The trial balance data presented in Problem 8-28 can be converted to reflect use of the cost method by inserting the following amounts in place of those presented for Bennett Corporation:

Stone Container Company reported retained earnings of \(\$ 25,000\) on the date Bennett Corporation purchased 60 percent of the stock.
\section*{Required}

a. Prepare the journal entries that would have been recorded on the books of Bennett Corporation during 20X4 under the cost method.

b. Prepare all eliminating entries needed to complete a consolidation workpaper as of December \(31,20 \times 4\), assuming Bennett uses the cost method.

c. Complete a three-part consolidation workpaper as of December 31, 20X4.

Transcribed Image Text:

Investment in Stone Container Stock Retained Earnings Income from Subsidiary Dividend Income $ 75,000 187,200 -0- 6,000