Prince Corporation acquired 100 percent of Sword Company on January 1, 20X7, for $203,000. The trial balances for the two companies on December 31, 20X7, included the following amounts:

	Prince Corporation				Sword Company
Item	Debit		Credit1		Debit		Credit
Cash	$	82,000			$	25,000
Accounts Receivable		50,000				55,000
Inventory		170,000				100,000
Land		80,000				20,000
Buildings and Equipment		500,000				150,000
Investment in Sword Company		240,000
Cost of Goods Sold		500,000				250,000
Depreciation Expense		25,000				15,000
Other Expenses		75,000				75,000
Dividends Declared		50,000				20,000
Accumulated Depreciation			$	155,000			$	75,000
Accounts Payable				70,000				35,000
Mortgages Payable				200,000				50,000
Common Stock				300,000				50,000
Retained Earnings				290,000				100,000
Sales				700,000				400,000
Income from Sword Company				57,000
	$	1,772,000	$	1,772,000	$	710,000	$	710,000

Additional Information

1. On January 1, 20X7, Sword reported net assets with a book value of $150,000. A total of $20,000 of the acquisition price is applied to goodwill, which was not impaired in 20X7.
2. Sword’s 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 $16,000 on December 31, 20X7.

Required:
a. Give all journal entries recorded by Prince with regard to its investment in Sword during 20X7.

b. Give all consolidating entries needed to prepare a full set of consolidated financial statements for 20X7.

• Record the basic consolidation entry.
• Record the amortized excess value reclassification entry.
• Record the excess value (differential) reclassification entry.
• Record the entry to eliminate the intercompany accounts.
• Record the optional accumulated depreciation consolidation entry.

c. Prepare a three-part consolidation worksheet as of December 31, 20X7.