100.00% Prime Company acquired of the common stock of Second Company on January 1, year one, for $600,000 On that date, Second had the following trial balance: account debit credit Additional paid in capital 100,000 Building (12-year life) 250,000 Common stock 170,000 Current assets 170,000 Equipment (6-yr life) 160,000 Land 110,000 Liabilities (due in 4 years) 300,000 Retained earnings 1/year 1 120,000 Totals 690,000 690,000 During year one, Second reported net income of During year one, Second paid dividends of $60,000 $30,000 During year two, Second reported net income of During year two, Second paid dividends of $80,000 $40,000 On January 1, year one, fair values were: Land $134,000 Building $286,000 Equipment $196,000 There was no impairment of any goodwill arising from the acquisition Please indicate clearly which method you choose for Prime to use to account for its acquisition of Second Company. Problem 4. Use the data for the Prime Company acquisition of the Second Company to prepare the consolidation worksheet entries for December 31 of year one. Problem 5. Use the data for the Prime Company acquisition of the Second Company to prepare the consolidation worksheet entries for December 31 of year two. 100.00% Prime Company acquired of the common stock of Second Company on January 1, year one, for $600,000 On that date, Second had the following trial balance: account debit credit Additional paid in capital 100,000 Building (12-year life) 250,000 Common stock 170,000 Current assets 170,000 Equipment (6-yr life) 160,000 Land 110,000 Liabilities (due in 4 years) 300,000 Retained earnings 1/year 1 120,000 Totals 690,000 690,000 During year one, Second reported net income of During year one, Second paid dividends of $60,000 $30,000 During year two, Second reported net income of During year two, Second paid dividends of $80,000 $40,000 On January 1, year one, fair values were: Land $134,000 Building $286,000 Equipment $196,000 There was no impairment of any goodwill arising from the acquisition Please indicate clearly which method you choose for Prime to use to account for its acquisition of Second Company. Problem 4. Use the data for the Prime Company acquisition of the Second Company to prepare the consolidation worksheet entries for December 31 of year one. Problem 5. Use the data for the Prime Company acquisition of the Second Company to prepare the consolidation worksheet entries for December 31 of year two