Branson paid $569,900 cash for all of the outstanding common stock of Wolfpack, Inc., on January 1, 2020. On that date, the subsidiary had a book value of $402,000 (common stock of $200,000 and retained earnings of $202,000), although various unrecorded royalty agreements (10-year remaining life) were assessed at a $139,000 fair value. Any remaining excess fair value was considered goodwill. In negotiating the acquisition price, Branson also promised to pay Wolfpack's former owners an additional $53,000 if Wolfpack's income exceeded $160,000 total over the first two years after the acquisition. At the acquisition date, Branson estimated the probability-adjusted present value of this contingent consideration at $37,100. On December 31, 2020, based on Wolfpack's earnings to date, Branson increased the value of the contingency to $42,400. During the subsequent two years, Wolfpack reported the following amounts for income and dividends: Net Income Dividends Declared 2020 $ 83,600 $ 20,000 2021 93,600 30,000 In keeping with the original acquisition agreement, on December 31, 2021, Branson paid the additional $53,000 performance fee to Wolfpack's previous owners. Prepare each of the following: a. Branson's entry to record the acquisition of the shares of its Wolfpack subsidiary. b. Branson's entries at the end of 2020 and 2021 to adjust its contingent performance obligation for changes in fair value and the December 31, 2021, payment. c. Prepare consolidation worksheet entries as of December 31, 2021, assuming that Branson has applied the equity method. d. Prepare consolidation worksheet entries as of December 31, 2021, assuming that Branson has applied the initial value method. Required A Required B Required Required D Prepare consolidation worksheet entries as of December 31, 2021, assuming that Branson has applied the equity method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event Credit 1 Accounts Common stock - Wolfpack Retained earnings - Wolfpack Investment in Wolfpack Debit 200,000 265,600 465,600 2 S Royalty agreements Goodwill Investment in Wolfpack 125,100 x 66,000 191,100 X 3 No Transaction Recorded 4 1 79,700 Equity earnings of Wolfpack Investment in Wolfpack DO 79,700 5 D 30.000 Investment in Wolfpack Dividends declared Olo 30,000 6 E 13,900 Amortization expense Royalty agreements O 13.900 Required A Required B Required Required D Prepare consolidation worksheet entries as of Decen. Required D assuming that Branson has applied the initial value method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event Accounts Debit Credit Investment in Wolfpack 49.700 Retained earnings - Branson 49.700 1 2 S Common stock - Wolfpack Retained earnings - Wolfpack Investment in Wolfpack 200,000 265,600 465,600 3 A Royalty agreements Goodwill Investment in Wolfpack gol 125,100 66,000 191,100 4 D No journal entry required x 5 1 x 30,000 X Dividend income Dividends declared 30,000 6 E 13,900 Amortization expense Royalty agreements 13.900