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On January 1, 2019, Triple A Company acquired Bodyguard Company's outstanding common stock for $842,000 in cash. As of that date the following information was
On January 1, 2019, Triple A Company acquired Bodyguard Company's outstanding common stock for $842,000 in cash. As of that date the following information was acquired from Bodyguard, the subsidiary of Triple A: Building (10-vear life) was undervalued on ite halanno choot he ces non As of December 31, 2021Triple A and Bodyguard reported the following for the year: Required: a. If Triple A applies the equity method, what is its investment account balance as of December 31, 2021? (7 marks) b. If Triple A applies the initial value method, what is its investment account balance as of December 31, 2021 ? (3.2 marks) c. Regardless of the accounting method in use by Triple A, what are the consolidated totals as of December 31, 2021, for each of the following accounts? (4.8 marks) d. Prepare the worksheet entries required on December 31, 2021, to consolidate the financial records of these two companies. Assume that Triple A applied the equity method to its investment account. (8 marks) e. Discuss how would the worksheet entries in requirement (d) change if Triple A used the initial value method? Do not record the entries. ( 2 marks)
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