3) The December 31, 2019, trial balances for Paul Corporation and its subsidiary Stuart are listed below.

Paul Corporation Stuart Company

Debit Credit Debit Credit

Cash $ 30,000 $ 8,000

Receivables (net) 13,000 12,000

Inventory, 1/1 12,000 10,000

Investment in S 150,000

Plant and equipment (net) 250,000 195,000

Land 100,000 80,000

Accounts payable $ 30,000 $ 10,000

Other liabilities 85,000 100,000

Common stock ($10 par) 250,000 100,000

Retained earnings, 1/1 168,000 84,000

Dividends declared 15,000 20,000

Sales 132,000 91,000

Dividend income 15,000

Purchases 60,000 30,000

Other expenses 50,000 _______ 30,000 _______

$680,000 $680,000 $385,000 $385,000

Inventory, 12/31 $15,000 $12,000

A. Prepare the journal entries found on Pauls books for 2019

To record Ps share of Ss dividends

B. Prepare the workpaper entries for 2019

To establish reciprocity (convert to equity)
To eliminate Ps share of Ss equity
To allocate the difference between implied and book value
To eliminate Ps share of Ss dividends