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. $ Steak Products Company Debit Credit 85, 110.000 100, eee 170,000 Item Cash & Receivables Inventory Land Buildings & Equipment Investment in Steak Products 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 Prime Corporation Debit 563.00 280, 100,000 520,000 299,000 140.000 45,000 35,000 50,000 $ 225, 80,000 240,000 320,000 402,000 220.000 45,000 $1,532,000 $1,532,000 70, eee 35,000 21,000 30,000 $ 145,000 40.000 26.000 120.000 110,000 180,000 $ 621,000 $ 621.000 Additional Information: 1. On the date of combination five years ago), the fair value of Steak's 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.) Required: a. Prepare all journal entries that Prime recorded during 20X5 related to its investment in Steak (If no entry is required for transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet Credit Debit 45,000 45,000 Record Prime Corp's share of Steak Products' 20x5 income. 30.000 30.000 Record Prime Corp's share of Steak Products' 20x5 dividend. 90.000 Record the amortization of the excess acquisition price. 90.000 b. Prepare all consolidating entries needed to prepare consolidated statements for 2005. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list transaction list Credit Debit 120.000 110,000 Record the basic consolidation entry. 30,000 B Record the amortized excess value reclassification entry. C Record the excess value (differential) reclassification entry: D Record the entry to eliminate the intercompany accounts. E Record the optional accumulated depreciation consolidation entry. 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.) view transaction list transaction list PRIME CORPORATION AND SUBSIDIARY Consolidated Financial Statements Worksheet December 31, 20x5 Consolidation Entries Prime Corp. Steak Products DR CR Consolidated Income Statement . Less COGS Less Depreciation expense Less Inventory losses Income from Steak Products Net Income Statement of Retained Earnings 5 05050 Beginning balance Net income Less Dividends declared Ending Balance S 0S 0S $ $ Assets Cash and receivables Inventory Buildings & equipment Less Accumulated depreciation Investment in Steak Products Goodwill Total Assets $ 0S 0S 0S Liabilities & Equity Accounts payable Notes payable Common stock Retained Total Liabilities & Equity 5050 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. $ Steak Products Company Debit Credit 85, 110.000 100, eee 170,000 Item Cash & Receivables Inventory Land Buildings & Equipment Investment in Steak Products 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 Prime Corporation Debit 563.00 280, 100,000 520,000 299,000 140.000 45,000 35,000 50,000 $ 225, 80,000 240,000 320,000 402,000 220.000 45,000 $1,532,000 $1,532,000 70, eee 35,000 21,000 30,000 $ 145,000 40.000 26.000 120.000 110,000 180,000 $ 621,000 $ 621.000 Additional Information: 1. On the date of combination five years ago), the fair value of Steak's 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.) Required: a. Prepare all journal entries that Prime recorded during 20X5 related to its investment in Steak (If no entry is required for transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet Credit Debit 45,000 45,000 Record Prime Corp's share of Steak Products' 20x5 income. 30.000 30.000 Record Prime Corp's share of Steak Products' 20x5 dividend. 90.000 Record the amortization of the excess acquisition price. 90.000 b. Prepare all consolidating entries needed to prepare consolidated statements for 2005. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list transaction list Credit Debit 120.000 110,000 Record the basic consolidation entry. 30,000 B Record the amortized excess value reclassification entry. C Record the excess value (differential) reclassification entry: D Record the entry to eliminate the intercompany accounts. E Record the optional accumulated depreciation consolidation entry. 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.) view transaction list transaction list PRIME CORPORATION AND SUBSIDIARY Consolidated Financial Statements Worksheet December 31, 20x5 Consolidation Entries Prime Corp. Steak Products DR CR Consolidated Income Statement . Less COGS Less Depreciation expense Less Inventory losses Income from Steak Products Net Income Statement of Retained Earnings 5 05050 Beginning balance Net income Less Dividends declared Ending Balance S 0S 0S $ $ Assets Cash and receivables Inventory Buildings & equipment Less Accumulated depreciation Investment in Steak Products Goodwill Total Assets $ 0S 0S 0S Liabilities & Equity Accounts payable Notes payable Common stock Retained Total Liabilities & Equity 5050