Everytime I do the math it tells me it's incorrect. Can somebody help me?
Prince Corporation holds 7'5 percent of the common stock of Sword Distributors Inc., purchased on December 31, 20x1, for $2,160,000. At the date of acquisition, Sword reported common stock with a parvalue of$920,000, additional paid-in capital of $1,270,000, and retained earnings of $530,000. The fair value of the noncontrolling interest at acquisition was $720,000. The differential at acquisition was attributable to the following items: Inventory (sold in 203(2) 5 46,690 Land 56,609 Goodwill 64,609 Total Differential $166,690 During 20x2, Prince sold a plot of land that it had purchased several years before to Sword ata gain of $22,400; Sword continues to hold the land. In 20KB, Prince and Sword entered into a five-year contract under which Prince provides management consulting services to Sword on a continuing basis; Sword pays Prince a fixed fee of $88,000 per year for these services. At December 31, 20X8, Sword owed Prince $22,000 as the final 20X8 quarterly payment under the contract. On January 2, 20X8, Prince paid $260,000 to Sword to purchase equipment that Sword was then carrying at $300,000. Sword had purchased that equipment on December 27, 20x2, for $450,000. The equipment is expected to have a total 15-year life and no salvage value. The amount ofthe differential assigned to goodwill has not been impaired. At December 31, 20KB, trial balances for Prince and Sword appeared as follows: Prince Corporation Smrd Distributors Inc. Item Debit Credit Debit Credit Cash 5 59,?30 $ 42,600 Current Receivables 113,390 161,400 Inventory 296,600 236,900 Investment in Sword Distributors 2,836,690 Land 411,600 1,216,600 Buildings 8. Equipment 2,486,600 3,186,600 Cost of Goods Sold 2,175,600 521,600 Depreciation 3 Amortization 196,600 76,600 Other Expenses 1,386,600 211,600 Dividends Declared 42,600 m Accumulated Depreciation $1,099,609 5 403,690 Current Payables 91,209 526,390 Bonds Payable 865,600 183,600 Common Stock 81,600 926,600 Additional Paidin Capital 1,265,600 1,226,600 Retained Earnings, Januaryr 1 1,464,300 1,326,600 Sales 4,93?,600 994,600 Other Income or Loss 95,609 34,609 u . J Sales 4,93?,660 994,909 Other Income or Loss 95,636 34,600 Income from Sword Distributors 145,530 Total $9,984,160 $9,984,160 $5,523,309 $5,523,309 As of December 31, 2OX8, Sword had declared but not yet paid its fourth-quarter dividend of $5,000. Both companies use straight-line depreciation and amortization. Prince uses the fully adjusted equity method to account for its investment in Sword. Required: a. Compute the amount of the differential as of January 1, 20X8. 0 Answer is complete and correct. 5) 120,000 a b. Verify the balance in Prince's Investment in Sword Distributors account as of December 31, 203KB. 9 Answer is complete but not entirely correct. ' 5 2,832,000 9 c. Present all consolidation entries that would appear in a three-part consolidation worksheet as of December 31, 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whole dollar amount.) x Answer is not complete. No Event Accounts Debit Credit A 1 Income from Sword Dist. 145,500 Additional paid-in capital 1,270,000 Common stock 920,000 Retained earnings 1,320,000 NCI in NI of Sword Dist. Dividends declared Investment in Sword Dist. NCI in NA of Sword Dist. B 2 Land 56,000 Goodwill 64,000 Investment in Sword Dist. 90,000 NCI in NA of Sword Dist. 30,000
