Prince Corporation acquired 100 percent of Sword Company on January 1, 20X7, for $193,000 The trial balances for the two companies on December 31, 20X7, included the following amounts Prince Corporation Sword Company Item Debit Credit Debit Credit Cash $ 82,000 $ 44,000 Accounts Receivable 68,000 73,000 Inventory 171,000 115,000 Land 80,000 39,000 Buildings and Equipment 494,000 167,000 Investment in Sword Company 250,000 Cost of Goods Sold 494,000 257,000 Depreciation Expense 21,000 11,000 Other Expenses 55,000 55,000 Dividends Declared 69,000 25,000 Accumulated Depreciation $ 153,000 $ 55,000 Accounts Payable 65,000 33,000 Mortgages Payable 181,000 155,000 Common Stock 286,000 48,000 Retained Earnings 321,000 87,000 Sales 696,000 408,000 Income from Sword Company 82,000 $ 1,784,000 $ 1,784,000 $ 786,000 $ 786,000 Additional Information On January 1, 20X7, Sword reported net assets with a book value of $135,000 A total of $25,000 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 $28,000 on December 31, 20X7 Required a Create 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 ) b Create all consolidating entries needed to create a full set of consolidated financial statements for 20X7 (If no entry is required for a transaction event, select No journal entry required in the first account field )

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Prince Corporation acquired 100 percent of Sword Company on January 1, 20X7, for $193,000. The trial balances for the two companies on December 31, 20X7,

Prince Corporation acquired 100 percent of Sword Company on January 1, 20X7, for $193,000. The trial balances for the two companies on December 31, 20X7, included the following amounts:

Prince Corporation Sword Company

Item Debit Credit Debit Credit

Cash $ 82,000 $ 44,000

Accounts Receivable 68,000 73,000

Inventory 171,000 115,000

Land 80,000 39,000

Buildings and Equipment 494,000 167,000

Investment in Sword Company 250,000

Cost of Goods Sold 494,000 257,000

Depreciation Expense 21,000 11,000

Other Expenses 55,000 55,000

Dividends Declared 69,000 25,000

Accumulated Depreciation $ 153,000 $ 55,000

Accounts Payable 65,000 33,000

Mortgages Payable 181,000 155,000

Common Stock 286,000 48,000

Retained Earnings 321,000 87,000

Sales 696,000 408,000

Income from Sword Company 82,000

$ 1,784,000 $ 1,784,000 $ 786,000 $ 786,000

Additional Information

On January 1, 20X7, Sword reported net assets with a book value of $135,000. A total of $25,000 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 $28,000 on December 31, 20X7.

Required:

a. Create 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.)

b. Create all consolidating entries needed to create a full set of consolidated financial statements for 20X7. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)