USING THE INITIAL VALUE METHOD, COMPLETE THE FOLLOWING JOURNAL ENTRY?

(THE AMOUNTS ARE WRONG, BUT ACCOUNTS ARE CORRECT)

Branson paid $566,700 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 $411,000 (common stock of $200,000 and retained earnings of $211,000), although various unrecorded royalty agreements (10-year remaining life) were assessed at a $136,000 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 $59,000 if Wolfpack's income exceeded $130,000 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 $41,300. On December 31, 2020, based on Wolfpack's earnings to date, Branson increased the value of the contingency to $47,200. During the subsequent two years, Wolfpack reported the following amounts for income and dividends: 2020 2021 Net Income $ 71,000 81,000 Dividends Declared $ 20,000 30,000 In keeping with the original acquisition agreement, on December 31, 2021, Branson paid the additional $59,000 performance fee to Wolfpack's previous owners. Consolidation Worksheet Entries Prepare entry *c to convert parent's beginning retained earnings to full accrual basis. Note: Enter debits before credits. Debit Credit Event 01 Accounts Investment in Wolfpack Retained earnings - Branson 66,400 64,600