Prepare consolidation worksheet entries as of December 31, 2021, assuming that Branson has applied the equity method

1. Prepare entry *C to convert parent's beginning retained earnings to full accrual basis. 2. Prepare entry S to record the elimination of common stock and retained earnings.

3. Prepare entry A to record the acquisition-date excess fair values over book values, unamortized balances as of beginning of year.

4. Prepare entry I to record the accrual of equity earnings.

5. Prepare entry D to record the dividends declared.

6.Prepare entry E to record excess fair-value amortization expenses.

Prepare consolidation worksheet entries as of December 31, 2021, assuming that Branson has applied the initial value method.

1. Prepare entry *C to convert parent's beginning retained earnings to full accrual basis.

2. Prepare entry S to record the elimination of common stock and retained earnings.

3. Prepare entry A to record the acquisition-date excess fair values over book values, unamortized balances as of beginning of year.

4. Prepare entry I to record the accrual of equity earnings

5. Prepare entry D to record the dividends declared.

6. Prepare entry E to record excess fair-value amortization expenses.

Branson paid $551,800 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 $370,000 (common stock of $200,000 and retained earnings of $170,000), although various unrecorded royalty agreements (10-year remaining life) were assessed at a $183,000 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 $66,000 if Wolfpack's income exceeded $150,000 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 $46,200. On December 31, 2020, based on Wolfpack's earnings to date, Branson increased the value of the contingency to $52,800. During the subsequent two years, Wolfpack reported the following amounts for income and dividends: 2020 2021 Net Income $ 81,000 91,000 Dividends Declared $ 15,000 25,000 In keeping with the original acquisition agreement, on December 31, 2021, Branson paid the additional $66,000 performance fee to Wolfpack's previous owners