On the Unadjusted/Non-consolidated Trial Balance for the two companies, is the $71,000 amount associated with the Income from Sword Company supposed to be the total debit balance or a total credit balance? What was done mathematically to get $74,000? How did they get $3,000? This is the only way that $74,000 is $74,000 from finding the sum between $71,000 and $3,000 together. Can you all show me the step by step work that was performed to get $3,000, please?

Iten Question 2: Prince Corporation acquired 100 percent of Sword Company on January 1, 20X7, for $200,000. The trial balances for the two companies on December 31, 20x7. included the following amounts: Prince Corporation Sword Company Debit Credit Debit Credit Cash $ 89,000 $ 32,000 Accounts Receivable 55,000 60,000 Inventory 173,000 117,000 Land 87,000 27,000 Buildings and Equipment 499,000 167,000 Investment in Sword Company 245,000 Cost of Goods sold 499,000 252,000 Depreciation Expense 20,000 10,000 Other Expenses 71,000 71,000 Dividends Declared 51,000 26,000 Accumulated Depreciation $ 145,000 $ 50,000 Accounts Payable 57,000 23,00 Mortgages Payable 200,000 141,800 Common Stock 286,000 48,000 Retained Earnings 333,000 93,000 Sales 697,000 407,600 Income from Sword Company 71,00 $1,789,000 $1,789,000 $762,000 $ 762,800 as som Additional Information ce 1. On January 1, 20X7, Sword reported net assets with a book value of $141,000. A total of $26,000 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 $18,000 on December 31, 20x7. Required: a. Prepare all 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.) Credit No Event 1 General Journal Investment in Sword Company Cash Debit 200,000 A > 200.000 B 2 Investment in Sword Company Income from Sword Company 74.000 O 74.000 26,000 Cash Investment Sword Company 26.000 D 4 3.000 Income from Sword Company Investment in Sword Company >> 3,000 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 DR Sword Co CR Corp Consolidated Income Statement Sales $ 697,000 $ 407,000 $ 1.104.000 Less: COGS (499,000) (252,000) (751,000) Less: Depreciation expense (20,000) (10,000) 3,000 (33,000) Less Other expenses (71.000) (71,000) (142,000) Income from Sword Co. 71.000 74,000 3,000 Net Income $ 178,000 $ 74,000 $ 77,000 3,000 $ 178,000 Statement of Retained Earnings Beginning balance 333.000 $ 93,000 $ 93,000 S 333,000 Net income 178,000 74,000 77,000 3.000 178,000 Less Dividends declared (51,000) (26,000) 26,000 (51,000) Ending Balance IS 460,000 $ 141,000 170,000 29,000 S 460,000 Balance Sheet Assets