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.) view transaction list transaction list No Event Accounts A 1 Common stock Retained earnings Income from Sword Company Dividends declared Investment in Sword Company Depreciation expense B 2 Income from Sword Company C 3 Buildings and equipment D 4 Goodwill Accumulated depreciation Investment in Sword Company Accounts payable Accounts receivable E 5 Accumulated depreciation Buildings and equipment Debit Credit 50,000 94,000 28,000 Prince Corporation acquired 100 percent of Sword Company on January 1, 20X7, for $205,000. The trial balances for the two companies on December 31, 20X7, included the following amounts: Prince Corporation Sword Company Item Debit Credit Debit Credit Cash $ 92,000 $ 28,000 Accounts Receivable 64,000 69,000 Inventory 173,000 102,000 Land 90,000 23,000 Buildings and Equipment 495,000 163,000 Investment in Sword Company 251,000 Cost of Goods Sold 495,000 253,000 Depreciation Expense 25,000 15,000 Other Expenses 65,000 65,000 Dividends Declared 67,000 28,000 Accumulated Depreciation $136,000 $75,000 Accounts Payable 66,000 27,000 Mortgages Payable 181,000 90,000 Common Stock 285,000 50,000 Retained Earnings 392,000 94,000 Sales 683,000 410,000 Income from Sword Company 74,000 $1,817,000 $1,817,000 $746,000 $746,000 Additional Information 1. On January 1, 20X7, Sword reported net assets with a book value of $144,000. 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 $22,000 on December 31, 20X7