Check my work mode : This shows what is correct or Incorrect for the work you have completed so far. It does not in Steak Products Company Debit Credit $ 65,000 90, ee 8e, eee 15e,eee Item Cash & Receivables Inventory Land Buildings & Equipment Investment in Steak Products Cost of Goods Sold Depreciation Expense Inventory losses Dividends Declared Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Income from Steak Products Prine Corporation Debit Credit $ 43,000 260, eee 80, een see, eee 235,000 120,000 25, Dee 15, cee 30,000 $ 205,00 be, een 2eeeee 309, eee 318,000 200,000 25,000 $1,300.00 $1,308,00 5e,eee 15, eee 5, eee 10, eee $195, eee 2e, eee 5e,eee 180, eee 90,000 109, eee $455, Bee 5455.000 Additional Information: 1. On the date of combination (five years ago), the fair value of Steak's depreciable assets was $50,000 more than the book value. Accumulated depreciation at that date was $10,000. The differential assigned to depreciable assets should be written off over the following 10-year period. 2. There was 10.000 of Intercorporate receivables and payables at the end of 20X5 Answer is not complete. No Event Accounts Debit Credit 1 Income from Steak Products 25,000 Dividends declared Investment in Steak Products 5,000 20.000 B 2 Common stock Retained earnings Investment in Steak Products 100,000 X 90,000 190.000 3 50,000 Buildings and equipment Investment in Steak Products Accumulated depreciation 30,000 20,000 D Depreciation expense Accumulated depreciation 5.000 5,000 E 5 Accounts payable Cash and receivables 10.000 10,000 Search Il VPN 8:14 PM 21% Requirement a:- Prepare all journal entries that Prime recorded during 20x5 related to its investment in steak. A. Record Prime Corp's share of Steak Products 20x5 income. Event Accounts Debit Credit 1 Investment in Steak Products $30,000 Income from Steak Products $30,000 (Record prime corp's share of steak product 20x5 income) Calculation of Net income Net Income - Sales - Cost of goods sold - Depreciation expense - Inventory loss Net Income - 100,000 - 50,000 - 15,000 - 5,000 Net Income = $30,000 3. Record Prime Corp's share of Steak Products 20x5 dividend. Event Accounts Debit Credit 2 Cash $10,000 Investment in Steak Products S10,000 (Record dividend from steak products) C. Record the amortization of excess acquistion price. Event Accounts Debit Credit 3 Income from Steak Products (50,000/10) $5,000 Investment in Steak Products $5,000 (Record amortization of excess value acquired) Requirement b:- Prepare all consolidated entries needed to prepare considated statements for 20x5. Event Accounts Debit Credit 1. Income from Steak Products (30,000 - 5,000) $25,000 Dividend Declared $5,000 Investment in Steak Products $20,000 (Record the income from subsidiary) 2. Common Stock - Steak Products Retained Earnings Investment in Steak Products (Record the beginning Investment balance) $100,000 $90,000 $190,000 $50,000 Building and Equipment Investment in Steak products Accumulated Depreciation (5,000 - 4) (To record excess value of Building and Equipment) $30,000 $20,000 4. $5,000 Depreciaiton Expense Accumulated Depreciation (Record Amortization of Excess Value) $5,000 Account Payable $10,000 Cash and Receivable $10.000 (Record the incorporate receivable and payables) I Hope I was able to help you. If this is helpful for you. Please b. Prepare all consolidating entries needed to prepare consolidated statements for 20X5. (If no entry is required for a transaction/event, select "No Journal entry required" In the first account field.) view transaction list Consolidation Worksheet Entries Record the basic consolidation entry, Note: Enter debits before credits. Event Debit Credit 1 25.000 Accounts Income from Steak Products Dividends declared Investment in Steak Products 5.000 20.000 Record entry Clear entry view consolidation entries b. Prepare all consolidating entries needed to prepare consolidated statements for 20X5. (If no entry transaction/event, select "No Journal entry required" In the first account field.) view transaction list Consolidation Worksheet Entries Record the entry to eliminate the intercompany accounts. Note: Enter debits before credits. Event Accounts Debit Credit 4 5.000 Depreciation expense Accumulated depreciation 5.000 Record entry Clear entry view consolidation entries er 4 Saved b. Prepare all consolidating entries needed to prepare consolidated statements for 20X5. (If no entry Is transaction/event, select "No Journal entry required" In the first account field.) view transaction list Consolidation Worksheet Entries Record the optional accumulated depreciation consolidation entry. Note: Enter debits before credits Event Accounts Debit Credit 5 Accounts payable Cash and receivables 10.000 10,000 Record entry Clear entry view consolidation entries c. Prepare a three-part worksheet as of December 31, 2005. (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 an enter this amount in the credit column of the worksheet.) PRIME CORPORATION AND SUBSIDIARY Consolidated Financial Statements Worksheet December 31, 20X5 Consolidation Entries me Corp. Steak Products DR Consolidated Income Statement s $ 01 $ 05 0 $ 0 Sales Less: COGS Less: Depreciation expense Less: Inventory losses Income from Steak Products Net Income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Assets Cash and receivables Inventory Land $ 0 $ 0 5 OS 0 $ Income from Steak Products 0 $ 0 $ 0 $ 0 $ 0 $ 0 s 0 $ 0 $ 0 Net Income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Assets Cash and receivables Inventory Land Buildings & equipment Less: Accumulated depreciation Investment in Steak Products Goodwill Total Assets Liabilities & Equity Accounts payable Notes payable Common stock 0 0 S 0 $ 0 $ Retained earnings Total Liabilities & Equity 0 $ 0 0 $ 0 S 0 Prime Corporation acquired 100 percent ownership of Steak Products Company on January 1, 20x1, for $200,000. On that date, Steak reported retained earnings of $50,000 and had $100,000 of common stock outstanding, Prime has used the equity method in accounting for its investment in Steak The trial balances for the two companies on December 31, 20x5, appear below. Steak Products Company Debit Credit $ 65,000 90,000 80,000 150, cee Ite Cash & Receivables Inventory Land Buildings & Equipment Investment in Steak Products Cost of Goods Sold Depreciation Expense Inventory losses Dividends Declared Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Income from Steak Products Prime Corporation Debit Credit $ 43,00 260,000 80,000 seg,000 235,000 120,000 25,00 15,000 30,00 $ 205,00 se, 200,000 304, 314,000 200.000 25,000 $1,308,00 $10.00 Se, 800 15,900 5,000 10,000 $ 105,000 20,000 50,000 100,000 90,000 100,00 $465,00 5465,00 Additional Information: 1. On the date of combination (five years ago). the fair value of Steak's depreciable assets was $50.000 more than the book value. Accumulated depreciation at that date was $10.000. The differential assigned to depreciable assets should be written off over the followino 10-vear period. Preu Next > hapter 4 Saved b. Prepare all consolidating entries needed to prepare consolidated statements for 20X5. (If no e transaction/event, select "No Journal entry required" In the first account field.) view transaction list Consolidation Worksheet Entries Record the basic consolidation entry, Note: Enter debits before credits. Event Debit Credit 1 25.000 Accounts Income from Steak Products Dividends declared Investment in Steak Products 5.000 20.000 Record entry Clear entry view consolidation entries b. Prepare all consolidating entries needed to prepare consolidated statements for 20X5. (If no entry transaction/event, select "No Journal entry required" In the first account field.) view transaction list Consolidation Worksheet Entries Record the entry to eliminate the intercompany accounts. Note: Enter debits before credits. Event Accounts Debit Credit 4 5.000 Depreciation expense Accumulated depreciation 5.000 Record entry Clear entry view consolidation entries er 4 Saved b. Prepare all consolidating entries needed to prepare consolidated statements for 20X5. (If no entry Is transaction/event, select "No Journal entry required" In the first account field.) view transaction list Consolidation Worksheet Entries Record the optional accumulated depreciation consolidation entry. Note: Enter debits before credits Event Accounts Debit Credit 5 Accounts payable Cash and receivables 10.000 10,000 Record entry Clear entry view consolidation entries c. Prepare a three-part worksheet as of December 31, 2005. (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 an enter this amount in the credit column of the worksheet.) PRIME CORPORATION AND SUBSIDIARY Consolidated Financial Statements Worksheet December 31, 20X5 Consolidation Entries me Corp. Steak Products DR Consolidated Income Statement s $ 01 $ 05 0 $ 0 Sales Less: COGS Less: Depreciation expense Less: Inventory losses Income from Steak Products Net Income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Assets Cash and receivables Inventory Land $ 0 $ 0 5 OS 0 $ Income from Steak Products 0 $ 0 $ 0 $ 0 $ 0 $ 0 s 0 $ 0 $ 0 Net Income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Assets Cash and receivables Inventory Land Buildings & equipment Less: Accumulated depreciation Investment in Steak Products Goodwill Total Assets Liabilities & Equity Accounts payable Notes payable Common stock 0 0 S 0 $ 0 $ Retained earnings Total Liabilities & Equity 0 $ 0 0 $ 0 S 0 Prime Corporation acquired 100 percent ownership of Steak Products Company on January 1, 20x1, for $200,000. On that date, Steak reported retained earnings of $50,000 and had $100,000 of common stock outstanding, Prime has used the equity method in accounting for its investment in Steak The trial balances for the two companies on December 31, 20x5, appear below. Steak Products Company Debit Credit $ 65,000 90,000 80,000 150, cee Ite Cash & Receivables Inventory Land Buildings & Equipment Investment in Steak Products Cost of Goods Sold Depreciation Expense Inventory losses Dividends Declared Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Income from Steak Products Prime Corporation Debit Credit $ 43,00 260,000 80,000 seg,000 235,000 120,000 25,00 15,000 30,00 $ 205,00 se, 200,000 304, 314,000 200.000 25,000 $1,308,00 $10.00 Se, 800 15,900 5,000 10,000 $ 105,000 20,000 50,000 100,000 90,000 100,00 $465,00 5465,00 Additional Information: 1. On the date of combination (five years ago). the fair value of Steak's depreciable assets was $50.000 more than the book value. Accumulated depreciation at that date was $10.000. The differential assigned to depreciable assets should be written off over the followino 10-vear period. Preu Next > hapter 4 Saved b. Prepare all consolidating entries needed to prepare consolidated statements for 20X5. (If no e transaction/event, select "No Journal entry required" In the first account field.) view transaction list Consolidation Worksheet Entries