Prince Corporation acquired 100 percent of Sword Company on January 1, 20X7, for $188,000. The trial balances for the two companies on December 31, 20X7, included the following amounts: $ Prince Corporation Debit Credit 84,000 53,000 170,000 82,000 492,000 Sword Company Debit Credit $ 29,000 58,000 103,000 24,000 170,000 Item Cash Accounts Receivable Inventory Land Buildings and Equipment Investment in Sword Company Cost of Goods Sold Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Mortgages Payable Common Stock Retained Earnings Sales Income from Sword Company 230,000 492,000 21,000 73,000 63,000 258,000 11,000 73,000 20,000 $ 55,000 $ 144,000 51,000 187,000 280,000 356,000 680,000 62,000 $1,760,000 24,000 125,000 45,000 90,000 407,000 $1,760,000 $746,000 $746,000 Additional Information 1. On January 1, 20X7, Sword reported net assets with a book value of $135,000. 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 $19,000 on December 31, 20X7. c. Prepare a three-part consolidation worksheet as of December 31, 20X7. (Values In the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus slgn, whlle all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries Into one amount and enter this amount in the credit column of the worksheet.) PRINCE CORPORATION AND SUBSIDIARY Consolidated Financial Statements Worksheet December 31, 20X7 Consolidation Entries Prince Corp Sword Co DR CR Consolidated Income Statement $ 0 $ 0 0 $ 0 Sales Less: COGS Less: Depreciation expense Less: Other expenses Income from Sword Co. Net Income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Balance Sheet Assets Cash Accounts receivable Inventory Land Buildings & equipment Less: Accumulated depreciation Investment in Sword Co. 0 $ 0 $ 0 $ 0 Goodwill 0 $ 0 $ 0 $ Total Assets Liabilities & Equity Accounts payable Mortgages payable Common stock Retained earnings Total Liabilities & Equity