Prime Corporation acquired 100 percent ownership of Steak Products Company on January 1, 20X1, for $290,000. On that date, Steak reported retained earnings of $86,000 and had $118,000 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 Debit Credit 61,000 278,000 98,000 518,000 292,600 138,000 43,000 Steak Products Company Debit Credit 83,000 108,000 98,000 168,000 Item Cash & Receivables Inventory Land Buildings & Equipment Investment in Steak Products uver SOBOT 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 68,000 33,000 19,400 28,000 33,000 48,000 $ 223,000 78,000 236,000 318,000 393,600 218,000 43,000 09,600 $ 141,000 38,000 28,400 118,000 108,000 172,000 $1,509,600 $ 605, 400 $ 605, 400 Additional Information: 1. On the date of combination (five years ago), the fair value of Steak's depreciable assets was $86,000 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 $28,000 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 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.) X Answer is not complete. No Event Accounts Debit Credit A 1 Income from Steak Products Common stock 8,600 X 118,000 108,000 Retained earnings Dividends declared 28,000 Investment in Steak Products Prime Corporation acquired 100 percent ownership of Steak Products Company on January 1, 20X1, for $290,000. On that date, Steak reported retained earnings of $86,000 and had $118,000 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 Debit Credit 61,000 278,000 98,000 518,000 292,600 138,000 43,000 Steak Products Company Debit Credit 83,000 108,000 98,000 168,000 Item Cash & Receivables Inventory Land Buildings & Equipment Investment in Steak Products uver SOBOT 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 68,000 33,000 19,400 28,000 33,000 48,000 $ 223,000 78,000 236,000 318,000 393,600 218,000 43,000 09,600 $ 141,000 38,000 28,400 118,000 108,000 172,000 $1,509,600 $ 605, 400 $ 605, 400 Additional Information: 1. On the date of combination (five years ago), the fair value of Steak's depreciable assets was $86,000 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 $28,000 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 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.) X Answer is not complete. No Event Accounts Debit Credit A 1 Income from Steak Products Common stock 8,600 X 118,000 108,000 Retained earnings Dividends declared 28,000 Investment in Steak Products
