a) Prepare the journal entries related to the investment in Silk Company during 2020 (15 points). b) Prepare Book Value calculation table (10 points)

c) Prepare basic consolidation entry (28 points).

QUESTION Purple Company acquired 70 percent of Silk Company's outstanding common stock for $44,800 on January 1, 2020, equals to the book value of Silk's net assets. Adjusted trial balance data for Purple and Silk as of December 31, 2020, are as follows (all amounts are in dollars): Purple Company Silk Company DR CR DR CR Cash $10,500 7,500 7,600 Accounts Receivable Inventory Investment in Silk Land Buildings and equipment Cost of Goods Sold Depreciation Expense Selling and Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales $15,000 23,000 22,000 54,600 22,000 87,500 32,500 6,700 25,600 8,200 27,700 58,000 38,200 3,200 15,600 4,000 $46,500 29,300 20,000 80,000 28,700 80,000 12,600 $15,000 8,300 10,000 40,000 24,000 75,000 Income from Silk Total $299 100 S297 100 $172,300 $172,300