Final answer:
No consolidation worksheet entry is necessary when applying the partial equity method for an investment in a subsidiary where the initial value, book values, and fair values of net assets acquired are all equal. This is because no differences that require adjustment exist between the values, making any consolidation adjustments unnecessary.
Step-by-step explanation:
When a company uses the partial equity method of accounting for investments and all values (initial value, book value, and fair value of net assets acquired) are equal, there is no excess of cost over book value. Therefore, no goodwill or other adjustments are recognized. In this case, since the investment is already correctly recorded at the investor's proportionate share of the subsidiary's equity, the partial equity method does not require any adjustments to the investment account as a result of the subsidiary's earnings or other comprehensive income.
The equity in subsidiary's income is recognized in the investor's income statement, and corresponding increases in the investment account occur. However, for the consolidation worksheet entry specific to your question, no entry to adjust the Investment in Subsidiary or Retained Earnings accounts is necessary for the investment initially or throughout the period because the values are equal and the equity method automatically adjusts the Investment in Subsidiary account for the investor's share of the subsidiary's earnings.