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 $900,000, additional paid-in capital of $1,250,000, and retained earnings of $530,000. 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)	$	50,000
Land		70,000
Goodwill		80,000
Total Differential	$	200,000

During 20X2, Prince sold a plot of land that it had purchased several years before to Sword at a gain of $28,000; 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 $92,000 per year for these services. At December 31, 20X8, Sword owed Prince $23,000 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		$	52,700								$	40,000
Current Receivables			102,800									90,400
Inventory			298,000									220,900
Investment in Sword Distributors			2,812,250
Land			406,000									1,211,000
Buildings & Equipment			2,570,000									3,080,000
Cost of Goods Sold			2,193,000									510,000
Depreciation & Amortization			184,000									83,000
Other Expenses			1,363,000									213,000
Dividends Declared			48,000									18,000
Accumulated Depreciation						$	1,098,000								$	410,000
Current Payables							93,200									441,300
Bonds Payable							879,000									190,000
Common Stock							91,000									900,000
Additional Paid-in Capital							1,270,000									1,250,000
Retained Earnings, January 1							1,474,800									1,300,000
Sales							4,877,000									1,002,000
Other Income or Loss							93,000					27,000
Income from Sword Distributors							153,750
Total		$	10,029,750			$	10,029,750				$	5,493,300			$	5,493,300

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.

Answer is not complete. Prince CORPORATION AND SUBSIDIARY Consolidated Financial Statement Works heet December 31, 20X8 Consolidation Entries Prince Sword Dist. DR CR Consolidated Corp. Income Statement Sales Other income (loss) Less: COGS Less: Depreciation & amort. expense Less: Other expenses Income from Sword Dist. Consolidated net income NCI in net income Controlling Interest in NI Statement of Retained Earnings Beginning balance Net income C C C Less: Dividends declared Ending Balance Balance Sheet C Cash Current receivables Inventory Land Buildings & equipment Less: Accumulated depr. Investment in Sword Dist. Goodwi Total Assets Current payables Bonds payable Common stock Additional Paid-in capital Retained earnings NCI in NA of Sword Dist. Total Liabilities & Equity C 0 0 0 Answer is not complete. Prince CORPORATION AND SUBSIDIARY Consolidated Financial Statement Works heet December 31, 20X8 Consolidation Entries Prince Sword Dist. DR CR Consolidated Corp. Income Statement Sales Other income (loss) Less: COGS Less: Depreciation & amort. expense Less: Other expenses Income from Sword Dist. Consolidated net income NCI in net income Controlling Interest in NI Statement of Retained Earnings Beginning balance Net income C C C Less: Dividends declared Ending Balance Balance Sheet C Cash Current receivables Inventory Land Buildings & equipment Less: Accumulated depr. Investment in Sword Dist. Goodwi Total Assets Current payables Bonds payable Common stock Additional Paid-in capital Retained earnings NCI in NA of Sword Dist. Total Liabilities & Equity C 0 0 0