Please help with journal entry G.
Prime Corporation acquired 80 percent of Steak Company's voting shares on January 1, 20X4, for $280,000 In cash and marketable securities. At that date, the noncontrolling Interest had a fair value of $70,000 and Steak reported net assets of $300,000. Assume Prime uses the fully adjusted equity method. Trial balances for the two companies on December 31, 20X7, are as follows: Prime Corporation Steak Company Item Debit Credit Debit Credit Cash $ 130, 308 $ 10, Gee Accounts Receivable 70, 908 Inventory 170, 080 110, 909 Buildings & Equipment 690, 090 490, 090 Investment in Steak Company 293,098 Cost of Goods Sold 416,908 202, 908 Depreciation Expense 30, 090 20, 080 Other Expenses 24,908 18, 908 Dividends Declared 5e, gee 25,090 Accumulated Depreciation 319, 090 $ 120, 090 Accounts Payable 15, 208 Bonds Payable 309, 908 Bond Premium 4, 890 Common Stock 298, 080 Additional Paid-in Capital 20, 090 Retained Earnings 337, 509 215, Bee Sales 50e, 908 258, 090 Other Income 20, 408 30, gee Income from Steak Company 25, 408 Total $1,793, 308 $1,793, 308 $855,080 $855, 080 Additional Information 1. The full amount of the differential at acquisition was assigned to buildings and equipment with a remaining 10-year economic life. 2. Prime and Steak regularly purchase Inventory from each other. During 20X6, Steak Company sold Inventory costing $40,000 to Prime Corporation for $60,000, and Prime resold 60 percent of the Inventory in 20X6 and 40 percent in 20X7. Also In 20X6, Prime sold Inventory costing $20,000 to Steak for $26,000. Steak resold two-thirds of the Inventory in 20X6 and one-third In 20X7. 3. During 20X7, Steak sold Inventory costing $30,000 to Prime for $45,000, and Prime sold items purchased for $9,000 to Steak for $12,000. Before the end of the year, Prime resold one-third of the Inventory it purchased from Steak In 20X7. Steak continues to hold all the units purchased from Prime during 20X7. 4. Steak owes Prime $10,000 on account on December 31, 20X7. 5. Assume that both companies use straight-line depreciation and that no property, plant, and equipment has been purchased since the acquisition.Required: a. Prepare the 20X7 journal entries recorded on Prime's books related to Its Investment In Steak If Prime uses the equity method. (If no entry Is required for a transaction/event, select "No Journal entry required" In the first account field.) View transaction list Journal entry worksheet Record the elimination of the deferred gross profit from upstream sales in 20X7. Note: Enter debits before credits. Event General Journal Debit Credit 7 Record entry Clear entry View general journal
