Prime Corporation acquired 100 percent ownership of Steak Products Company on January 1, 20X1, for $300,000. On that date, Steak reported retained earnings of $90,000 and had $120,000 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.

	Prime Corporation									Steak Products Company
Item	Debit				Credit					Debit				Credit
Cash & Receivables		$	63,000								$	85,000
Inventory			280,000									110,000
Land			100,000									100,000
Buildings & Equipment			520,000									170,000
Investment in Steak Products			299,000
Cost of Goods Sold			140,000									70,000
Depreciation Expense			45,000									35,000
Inventory Losses			35,000									21,000
Dividends Declared			50,000									30,000
Accumulated Depreciation						$	225,000								$	145,000
Accounts Payable							80,000									40,000
Notes Payable							240,000									26,000
Common Stock							320,000									120,000
Retained Earnings							402,000									110,000
Sales							220,000									180,000
Income from Steak Products							45,000
		$	1,532,000			$	1,532,000				$	621,000			$	621,000

Additional Information:

1. On the date of combination (five years ago), the fair value of Steaks depreciable assets was $90,000 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 $30,000 of intercorporate receivables and payables at the end of 20X5.

Required: a. Prepare all journal entries that Prime recorded during 20X5 related to its investment in Steak. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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.)

c. Prepare a three-part worksheet as of December 31, 20X5. (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.)

Journal entry worksheet Record the basic consolidation entry. Note: Enter debits before credits. Event Accounts Debit Credit 1 Record entry Clear entry view consolidation entries PRIME CORPORATION AND SUBSIDIARY Consolidated Financial Statements Worksheet December 31, 20X5 Consolidation Entries Prime Corp. Steak Products DR CR Consolidated Income Statement 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 Buildings & equipment Less: Accumulated depreciation Investment in Steak Products Goodwill Total Assets Liabilities & Equity Accounts payable Notes payable Common stock Retained earnings Total Liabilities & Equity