Reference no: EM133040888
Problem - Prince Corporation acquired 100 percent of Sword Company on January 1, 20X7, for $203,000. The trial balances for the two companies on December 31, 20x7, included the following amounts:
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Prince Corporation
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Sword Company
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Debit
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Credit
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Debit
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Credit
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Cash
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$94,000
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$32,000
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|
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Accounts Receivable
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66,000
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71,000
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|
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Inventory
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176,000
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108,000
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|
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Land
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92,000
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27,000
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Buildings and Equipment
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500,000
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154,000
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Investment in Sword Company
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260,000
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|
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Cost of Goods Sold
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500,000
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255,000
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Depreciation Expense
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20,000
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10,000
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Other Expenses
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64,000
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64,000
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Dividends Declared
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55,000
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28,000
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Accumulated Depreciation
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$153,000
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$50,000
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Accounts Payable
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53,000
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21,000
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Mortgages Payable
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184,000
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119,000
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Common Stock
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|
293,000
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|
48,000
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Retained Earnings
|
|
362,000
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|
94,000
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Sales
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697,000
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|
417,000
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Income from Sword Company
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85,000
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|
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$1,827,000
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$1,827,000
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$749,000
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$749,000
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Additional Information -
1. On January 1, 20X7, Sword reported net assets with a book value of $142,000. A total of $28,000 of the acquisition price is applied to goodwill, which was not impaired in 20X7.
2. Sword's depreciable assets had an estimated economic life of 11 years on the date of combination. The difference between fair value and book value of tangible assets is related entirely to buildings and equipment.
3. Prince used the equity-method in accounting for its investment in Sword.
4. Detailed analysis of receivables and payables showed that Sword owed Prince $16,000 on December 31, 20X7.
Required - Prepare a three-part consolidation worksheet as of December 31, 20X7.