Prince Corporation holds 75 percent of the common stock of Sword Distributors Inc., purchased on December 31, 20X1, for $2,160,000. At the date of acquisition, Sword reported common stock with a par value of $920,000, additional paid-in capital of $1,270,000, and retained earnings of $540,000. The fair value of the noncontrolling interest at acquisition was $720,000. The differential at acquisition was attributable to the following items:

Inventory (sold in 20X2)	$	37,500
Land		52,500
Goodwill		60,000
Total Differential	$	150,000

During 20X2, Prince sold a plot of land that it had purchased several years before to Sword at a gain of $21,000; Sword continues to hold the land. In 20X6, Prince and Sword entered into a five-year contract under which Prince provides management consulting services to Sword on a continuing basis; Sword pays Prince a fixed fee of $94,000 per year for these services. At December 31, 20X8, Sword owed Prince $23,500 as the final 20X8 quarterly payment under the contract. On January 2, 20X8, Prince paid $280,000 to Sword to purchase equipment that Sword was then carrying at $320,000. Sword had purchased that equipment on December 27, 20X2, for $480,000. The equipment is expected to have a total 15-year life and no salvage value. The amount of the differential assigned to goodwill has not been impaired. At December 31, 20X8, trial balances for Prince and Sword appeared as follows:

	Prince Corporation									Sword Distributors Inc.
Item	Debit				Credit					Debit				Credit
Cash		$	65,700								$	53,000
Current Receivables			118,800									106,400
Inventory			304,000									223,900
Investment in Sword Distributors			2,832,375
Land			412,000									1,204,000
Buildings & Equipment			2,450,000									3,140,000
Cost of Goods Sold			2,189,000									514,000
Depreciation & Amortization			202,000									73,000
Other Expenses			1,366,000									225,000
Dividends Declared			47,000									17,000
Accumulated Depreciation						$	1,102,000								$	415,000
Current Payables							94,200									476,300
Bonds Payable							994,000									180,000
Common Stock							90,000									920,000
Additional Paid-in Capital							1,255,000									1,270,000
Retained Earnings, January 1							1,461,800									1,320,000
Sales							4,750,625									1,004,000
Other Income or Loss							90,000					29,000
Income from Sword Distributors							149,250
Total		$	9,986,875			$	9,986,875				$	5,585,300			$	5,585,300

As of December 31, 20X8, Sword had declared but not yet paid its fourth-quarter dividend of $5,000. Both companies use straight-line depreciation and amortization. Prince uses the fully adjusted equity method to account for its investment in Sword. Required: a. Compute the amount of the differential as of January 1, 20X8.

Required: a. Compute the amount of the differential as of January 1, 20x8 Remaining cirente b. Verify the balance in Prince's Investment in Sword Distributors account as of December 31, 2oxa. Balance in Inwestment in Sword Account c. Present all consolidation entries that would appear in a three-part consolidation worksheet as of December 31, 20X8. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Round your answers to nearest whole dollar amount.) view transaction liat X A Record the basic consolidation entry Record the excess value (differential) reclassification entry C Racord the entry to eliminate the intercompany service revenue D Racord the antry to eliminate the intercompany recevables/payables Credit E Record the entry to eliminate the intercompany dividend owed. F Record the entry to eliminate the gain on the sale of land Note :- jumal entry has been entered d. Prepare and complete a three-part worksheet for the preparation of consolidated financial statements for 20X8. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while 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.) Consolidated Prince CORPORATION AND SUBSIDIARY Consolidated Financial Statement Worksheet December 31, 20XB Consolidation Entries Prince Corp. Sword DR CR Dist. Income Statement Sales Other income (1055 Les cons Less: Deprecision & amort, expense | LEAE Otha Incame from Sword Dist. Consolidated neline NClin net income Controlling Interest in NI Statement of Retained Earnings Beginning balance Not income Leak Didenda dadared Ending Balance Balance Sheet Cash Current recevables Inventory Land Building & ciment Les Accumulated Investment in Sword Dis! Goodwil Total Asset Ourrent payables Bonds payable Commen weck Additional Paid in capital - Retained earnings NClin NA of Sword Dict Total Liabilities & Equity