Prince Corporation acquired 100 percent of Sword Company on January 1, 20X7, for $187,000. The trial balances for the two companies on December 31, 20X7, included the following amounts:

	Prime	Corp	Sword	Company
	Debit	Credit	Debit	Credit
Cash	88,000		36,000
Accounts Receivable	64,000		69,000
Inventory	174,000		115,000
Land	86,000		31,000
Buildings and Equipment	495,000		167,000
Investment in Sword Company	241,000
Cost of Goods Sold	495,000			254,000
Depreciation Expense	23,000			13,000
Other Expenses	56,000			56.000
Dividends Declared	50,000			24,000
Accumulated Depreciation		152,000		65,000
Accountants Payable		65,000		30,000
Mortgages Payable		188,000		136,000
Common Stock		283,000		50,000
Retained Earnings		309,000		80,000
Sales		697000		404,000
Income from Sword Company		78,000
	1,772,000	1,772,000	765,000	765,000

Additional Information:

1. On January 1, 20X7, Sword reported net assets with a book value of $130,000. A total of $24,000 of the acquisition price is applied to goodwill, which was not impaired in 20X7.

2. Swords 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 $25,000 on December 31, 20X7.

	PRINCE	COMPANY	AND	SUBSIDARY
	CONSOLIDATED	FINANCIAL	STATEMENT	WORKSHEET
		DECEMBER	31	20X7
			Consolidated	Entries
	Prince Corp	Sword Company	DR	CR	Consolidated
Sales	697,000	404,000
Less: Cost of Goods Sold	(495,000)	(254,000)
Less: Depreciation Expense	(23,000)	(13,000)
Less: Other Expenses	(56,000)	(56,000)
Income Sword Company	78,000
Net Income
Statement of Retained Earnings
Beginning Balance
Net Income
Less: Dividends Declared				24,000
Ending Balance
Balance Sheet
Assets
Cash	88,000	36,000
Accounts Receivable	64,000	69,000
Inventory	174,000	115,000
Land	86,000	31,000
Building & Equipment	495,000	167,000
Less Accumulated Depreciation	(152,000)	(65,000)
Investment in Sword Company	241,000
Goodwill				24,000
Total Assets
Liability & Equity
Accounts Payable	65,000	30,000
Mortgages Payable	188,000	136,000
Common Stock	283,000	50,000
Retained Earnings	50,000	24,000
Total Liabilities & Equity	586,000	240,000	0	0	826,000

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