Chapter 7 Homework NE Sare & Check my w 00 8 Prince Corporation holds 75 percent of the common stock of Sword Distributors in purchased on December 31, 20x1 for $2.300.000 At the date of acquisition Sword reported common stock with a pare of $990,000, aditional prin capital of 1260,000, and retained wings of $540.000. The fair value of the non controlling interest at $700.000. The differentiata con was butable to the following tems 122 By I wala l lm 31.50 . 18. Tutal sites During 2000. Prince said a plot of land that it had purchased several years before to Sword as gan of 2.600 Sword continues to hold the land in 20X6. Prince and Sword entered into a five your contract under which Price provides angement Services to Sword on continuing Sword as Pinceffe of 59100 per year for at December Sword owed Prince $22.750 as the final 20 urterly and under the contact On January 2, 208, Prince paid $260.000 to Sword to purchase that Sword with $300.000 Swed purchased that went on December 27, 20x2.for $450.000 The expected to have salge value. The amount of the differentiated to goodwill has not been impaired At December 2010. tribales for Prince and Sword puwed as follows: D . 1. Cam G Ewy 10. 2.), . 2. TODO N. TE B. 3. SELLE but cost afe 11.16 1. Help Save 00 8 Check my work 1.22 point Credit BO At December 31, 20x8, trial balances for Prince and Sword appeared as follows TE Prince Corporation Cash Credit Current Receivables 1 56,700 Inventory 1944, 305.000 Investment in Sword Distributors Land 2,792,035 lidingspent Cost 2.500.000 of Goods Sold 2,175.000 Depreciation Normation 191.000 Other passen Dividend Declared 1,375,000 49,000 heelated Depreciation 53.80.000 Current Payable 18.30 Donde Payable 302.000 Canon Stock 15.00 Adal Pad-in Capital 1,267,010 Retained tanning. Jary 1 1,412,00 4,736,295 37.900 Other Inco or to 150, 256 Income from word Distributors Total 510,040, $10.010, 44.000 92.400 233.900 1,215.000 3.650.000 513,000 13.000 210,00 13.00 1 418.000 17.30 14.00 10.00 1,200.000 1.310.000 1.003.900 Sales 31.00 15,43,100 15,412,00 As of December 31, 20XB, Sword had declared but not yet paldies fourth quarter dividend of $5,000. Both companies te weine depreciation and amortization. Prince uses the fully adjusted equity method to account for os investment in Sword Required: a. Compute the amount of the differential as of January 2008 Remaining the 5 6 500 open) Homework EYE Saved 8. b. Verify the balance in Prince's Investment in Sword Distributors account as of December 31, 20X8. Balance in Investment in Sword Account 1.22 points Book Print References c. Present all consolidation entries that would appear in a three-part consolidation worksheet as of December 31, 20X8. (if no entry required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whe dollar amount.) view transaction ist transaction ist Credit Debit Accounts No Event Income from Sword Dist. view transaction list transaction list X: : A Record the basic consolidation entry. B Record the excess value (differential) reclassification entry. C Record the entry to eliminate th Wintercompany service revenue. Record the entry to eliminate the intercompany receivables/payables. Record the entry to eliminate the intercompany dividend owed. Record the entry to eliminate the gain on the sale of Note: journal entry has been entered red for a transaction/event, select "No journal entry r amount.) view transaction list transaction list === --- - revenue. Record the entry to eliminate the intercompany receivables/payables. Record the entry to eliminate the intercompany dividend owed. Record the entry to eliminate the gain on the sale of land. G Record the entry to eliminate the gain on equipment and to correct the asset's basis. H Record the entry to adjust Accumulated Depreciation. Note : = journal entry has been entered 8 d. Prepare and complete a three-part worksheet for the preparation of consolidated financial statements for 20x8les in the first two columns (the parent and subsidiary balances that are to be deducted should be indicated with a mission, while all values in the Consolidation Entries columns should be entered as positive values. For accounts where multiple justing entries are required, combine all debit entries into one amount and enter this amount in the debt column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet 122 DO ce CR Cord Prince CORPORATION AND SUSOWY Cand Financial Man Worst December 11, 20 Cendation Price Corp word DIR Income Statement Sale Other income LCOGS Les Degreco mat pense Opens Income Tom Sword Dist Consideriname 0 NCIntino Controlling Interestin 0 0 Statement of Retained Earings Beginning income Les Dividends cred D Ending Balance Balance Sheet 0 0 1.22 points 0 0 0 0 0 eBook Print References Net Income Less: Dividends declared Ending Balance Balance Sheet Cash Current receivables Inventory Land Buildings & equipment Less: Accumulated depr. Investment in Sword Dist. Goodwill Total Assets Current payables Bonds payable Common stock Additional Paid-in capital Retained earnings NCI in NA of Sword Dist. Total Liabilities & Equity O 0 + 0 0 0 0 0 Chapter 7 Homework NE Sare & Check my w 00 8 Prince Corporation holds 75 percent of the common stock of Sword Distributors in purchased on December 31, 20x1 for $2.300.000 At the date of acquisition Sword reported common stock with a pare of $990,000, aditional prin capital of 1260,000, and retained wings of $540.000. The fair value of the non controlling interest at $700.000. The differentiata con was butable to the following tems 122 By I wala l lm 31.50 . 18. Tutal sites During 2000. Prince said a plot of land that it had purchased several years before to Sword as gan of 2.600 Sword continues to hold the land in 20X6. Prince and Sword entered into a five your contract under which Price provides angement Services to Sword on continuing Sword as Pinceffe of 59100 per year for at December Sword owed Prince $22.750 as the final 20 urterly and under the contact On January 2, 208, Prince paid $260.000 to Sword to purchase that Sword with $300.000 Swed purchased that went on December 27, 20x2.for $450.000 The expected to have salge value. The amount of the differentiated to goodwill has not been impaired At December 2010. tribales for Prince and Sword puwed as follows: D . 1. Cam G Ewy 10. 2.), . 2. TODO N. TE B. 3. SELLE but cost afe 11.16 1. Help Save 00 8 Check my work 1.22 point Credit BO At December 31, 20x8, trial balances for Prince and Sword appeared as follows TE Prince Corporation Cash Credit Current Receivables 1 56,700 Inventory 1944, 305.000 Investment in Sword Distributors Land 2,792,035 lidingspent Cost 2.500.000 of Goods Sold 2,175.000 Depreciation Normation 191.000 Other passen Dividend Declared 1,375,000 49,000 heelated Depreciation 53.80.000 Current Payable 18.30 Donde Payable 302.000 Canon Stock 15.00 Adal Pad-in Capital 1,267,010 Retained tanning. Jary 1 1,412,00 4,736,295 37.900 Other Inco or to 150, 256 Income from word Distributors Total 510,040, $10.010, 44.000 92.400 233.900 1,215.000 3.650.000 513,000 13.000 210,00 13.00 1 418.000 17.30 14.00 10.00 1,200.000 1.310.000 1.003.900 Sales 31.00 15,43,100 15,412,00 As of December 31, 20XB, Sword had declared but not yet paldies fourth quarter dividend of $5,000. Both companies te weine depreciation and amortization. Prince uses the fully adjusted equity method to account for os investment in Sword Required: a. Compute the amount of the differential as of January 2008 Remaining the 5 6 500 open) Homework EYE Saved 8. b. Verify the balance in Prince's Investment in Sword Distributors account as of December 31, 20X8. Balance in Investment in Sword Account 1.22 points Book Print References c. Present all consolidation entries that would appear in a three-part consolidation worksheet as of December 31, 20X8. (if no entry required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whe dollar amount.) view transaction ist transaction ist Credit Debit Accounts No Event Income from Sword Dist. view transaction list transaction list X: : A Record the basic consolidation entry. B Record the excess value (differential) reclassification entry. C Record the entry to eliminate th Wintercompany service revenue. Record the entry to eliminate the intercompany receivables/payables. Record the entry to eliminate the intercompany dividend owed. Record the entry to eliminate the gain on the sale of Note: journal entry has been entered red for a transaction/event, select "No journal entry r amount.) view transaction list transaction list === --- - revenue. Record the entry to eliminate the intercompany receivables/payables. Record the entry to eliminate the intercompany dividend owed. Record the entry to eliminate the gain on the sale of land. G Record the entry to eliminate the gain on equipment and to correct the asset's basis. H Record the entry to adjust Accumulated Depreciation. Note : = journal entry has been entered 8 d. Prepare and complete a three-part worksheet for the preparation of consolidated financial statements for 20x8les in the first two columns (the parent and subsidiary balances that are to be deducted should be indicated with a mission, while all values in the Consolidation Entries columns should be entered as positive values. For accounts where multiple justing entries are required, combine all debit entries into one amount and enter this amount in the debt column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet 122 DO ce CR Cord Prince CORPORATION AND SUSOWY Cand Financial Man Worst December 11, 20 Cendation Price Corp word DIR Income Statement Sale Other income LCOGS Les Degreco mat pense Opens Income Tom Sword Dist Consideriname 0 NCIntino Controlling Interestin 0 0 Statement of Retained Earings Beginning income Les Dividends cred D Ending Balance Balance Sheet 0 0 1.22 points 0 0 0 0 0 eBook Print References Net Income Less: Dividends declared Ending Balance Balance Sheet Cash Current receivables Inventory Land Buildings & equipment Less: Accumulated depr. Investment in Sword Dist. Goodwill Total Assets Current payables Bonds payable Common stock Additional Paid-in capital Retained earnings NCI in NA of Sword Dist. Total Liabilities & Equity O 0 + 0 0 0 0 0