10 10

10. To continue with Exercise 9, the following are the trial balances as of December 31, Cash Accounts Receivable Inventories Land Building Equipment Investment in Coffee co. Cost of Sales Expenses Dividends declared TOTAL Accounts Payable Accumulated Depreciation Building Accumulated Depreciation Equipment Common Shares, par 50 and par 20 Share Premium Retained Earnings Sales Dividend Income TOTAL Caramel co. P250,ooo 370,000 125,000 600,000 760,000 750,000 425,000 375,000 100,000 P337,500 450,000 200,000 400,000 780,000 1,539,500 48,000 20222 Coffee co. P115,ooo 215,000 45,000 150,000 260,000 640,000 325,000 145,000 60,000 P215,ooo 75,000 50,000 300,000 530,000 785,000 Before the year ended, another downstream sale of inventory took place. The sale included a mark-up Of 25% Of cost and the unsold portion Of P15,OOO represented one fourth of the total intercompany sales. Required: Prepare the working paper entries. Compute for the consolidated retained earnings What will be the updated balance of the investment account had Caramel Company used the equity method?