Question
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,
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:
Prince CorporationSword CompanyItemDebitCreditDebitCreditCash$93,000$43,000Accounts Receivable67,00072,000Inventory178,000112,000Land91,00038,000Buildings and Equipment491,000152,000Investment in Sword Company258,000Cost of Goods Sold491,000253,000Depreciation Expense21,00011,000Other Expenses56,00056,000Dividends Declared69,00021,000Accumulated Depreciation$141,000$55,000Accounts Payable62,00031,000Mortgages Payable199,000124,000Common Stock300,00050,000Retained Earnings334,00083,000Sales687,000415,000Income from Sword Company92,000$1,815,000$1,815,000$758,000$758,000
Additional Information
- On January 1, 20X7, Sword reported net assets with a book value of $133,000. A total of $21,000 of the acquisition price is applied to goodwill, which was not impaired in 20X7.
- 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.
- Prince used the equity-method in accounting for its investment in Sword.
- Detailed analysis of receivables and payables showed that Sword owed Prince $26,000 on December 31, 20X7.
****************I'M ONLY HAVING A HARD TIME FIGURING OUT THE ACCUMULATED DEPRECIATION*************
Required:
a. all journal entries recorded by Prince with regard to its investment in Sword during 20X7.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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