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QUESTION CR 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 Cash $15,000 $10,500 Accounts Receivable 23,000 7,500 Inventory 22,000 7,600 Investment in Silk 54,600 Land 22,000 27,700 Buildings and equipment 87,500 58,000 Cost of Goods Sold 32,500 38,200 Depreciation Expense 6,700 3,200 Selling and Administrative Expense 25,600 15,600 Dividends Declared 8,200 4,000 Accumulated Depreciation $46,500 $15,000 Accounts Payable 29,300 8,300 Bonds Payable 20,000 10,000 Common Stock 80,000 40,000 Retained Earnings 28,700 24,000 Sales 80,000 75,000 Income from Silk 12,600 Total $297,100 $297,100 $172,300 $172,300 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 CR 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 Cash $15,000 $10,500 Accounts Receivable 23,000 7,500 Inventory 22,000 7,600 Investment in Silk 54,600 Land 22,000 27,700 Buildings and equipment 87,500 58,000 Cost of Goods Sold 32,500 38,200 Depreciation Expense 6,700 3,200 Selling and Administrative Expense 25,600 15,600 Dividends Declared 8,200 4,000 Accumulated Depreciation $46,500 $15,000 Accounts Payable 29,300 8,300 Bonds Payable 20,000 10,000 Common Stock 80,000 40,000 Retained Earnings 28,700 24,000 Sales 80,000 75,000 Income from Silk 12,600 Total $297,100 $297,100 $172,300 $172,300 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)

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