2 25 points book Prince Corporation acquired 100 percent of Sword Company on January 1, 20X7, for $189,000. The trial balances for the two companies on December 31, 20x7. Included the following amounts: Prince Corporation Sword Company Item Debit Credit DABLE Credit Cazh $ 4,000 $ 41,00 Anot Receivable 61,000 66,00 Inventory 111,000 107, DOO Bussing and tant 82,000 36,00 494, 000 151,00 Investint in smord Company 236,000 Cost of Goods Sold 494,000 24,900 290.00 Depreciation Expono 14,90 54,900 64, Dividenda Declared 61,000 2.000 Accumulated Dupreciation $ 149,000 $ 70, DDD Account Payable 63,000 31, DDD Mortgages Payable 199,000 122,DDO Come Stock 200,000 41,DDD Retained Earnings 324,900 17, DDD EB, 900 406,00 Income from Sword Company 75,000 $1,770,000 $1,770,000 757, $75,000 $757,000 Print Parthos Additional Information 1 On January 1 20X7, Sword reported net assets with a book value of $128,000. 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 $26,000 on December 31, 20x7. Required: a. Prepare al journal entries recorded by Prince with regard to its investment in Sword during 20x7. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transactions Journal entry worksheet A Record the initial investment in Sword Co. > Note: twardebit balore credits General Journal Debit Credit Event 1 Record entry Clear entry View general Journal b. Prepare all consolidating entries needed to prepare a full set of consolidated financial statements for 20x7. (if no entry is required for a transaction/event, select "No journal entry required in the first account field.) wlew ramactionist Consolidation Worksheet Entries A B > Record the basic consolidation entry. Note: Enter debits before credits Event Accounts Dubit Credit Record entry Clear entry view consolidation entre c. Prepare a three part consolidation worksheet as of December 31, 20x7. (Values in the first two columns (the "parent" and "subsidiary" balances that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.) PRINCE CORPORATION AND SUBSIDIARY Consolidated Financial Statements Worksheet December 31, 20X7 Consolidation Entries Prince Corp Sword Co DR CR Consolidated Income Statement Sales Lesa CO Less: Depreciation expert Lesa: Other expenses Income from Sword Co Net Income Statement of Retained Earnings Beginning balance Not income Lass Dividends declared Ending Balance Balance Sheet Assets Cash Accounts receivable Inventory Land Buildings & equipment ME