Proud Corporation acquired 80 percent of Spirited Company's voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Spirited at that date. Assume that the accumulated depreciation on depreciable assets was $52,000 on the acquisition date. Proud uses the equity method in accounting for ownership of Spirited during 20X3. On December 31, 20X3, the trial balances of the two companies are as follows: Spirited Company Debit Credit $106,000 308,000 13,000 69,000 22,000 Item Current Assets Depreciable Assets Investment in Spirited Company Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities Long-Term Debt Common Stock Retained Earnings Sales Income from Spirited Company Proud Corporation Debit Credit $175,000 517,000 114,400 23,000 105,000 54,000 $ 158,000 46,000 117,400 198,000 228,000 205,000 36,000 $988,400 $988,400 $ 65,000 36,000 170,000 85,000 35,000 127,000 $933,482 $518,000 $518,000 Required: a. Prepare all consolidation entries required as of December 31, 20X3, to prepare consolidated financial statements. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Required: a. Prepare all consolidation entries required as of December 31, 20X3, to prepare consolidated financial statements. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Answer is complete but not entirely correct. No Event Accounts Debit Credit 1 Common stock Retained earnings Income from Spirited Company NCI in NI of Spirited Company Dividends declared Investment in Spirited Company NCI in NA of Spirited Company 85,000 35,000 36,000 12,000 22.000 114.400 12.000 X B 2 52,000 Accumulated depreciation Depreciable assets 52,000 Consolidated PROUD CORPORATION AND SUBSIDIARY Worksheet for Consolidated Financial Statements December 31, 20X3 Consolidation Entries Proud Spirited DR CR Corp. Co. Income Statement Sales Less: Depreciation expense Less: Other expenses Income from Spirited Co. Consolidated Net Income $ 0 $ 0 $ 0 NCI in Net income Controlling Interest in Net Income $ 0 $ 0 0 $ Statement of Retained Earnings Beginning balance Net income 0 0 0 Less: Dividends declared Ending Balance 0 $ 0 0 0 $ 0 0 $ $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Balance Sheet Current assets Depreciable assets Less: Accumulated depreciation Investment in Spirited Co. Total Assets Liabilities and Equity Current liabilities Long-term debt Common stock Retained earnings NCI in NA of Spirited Co. Total Liabilities and Equity 0 0 0 0 0 $ 0 0 $ 0 $ 0 PROUD CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X3 Assets 0 Total Assets $ 0 Liabilities Stockholders' Equity: Controlling Interest Total Controlling Interest 0 Total Stockholder's equity Total Liabilities and Stockholders' Equity 0 PROUD CORPORATION AND SUBSIDIARY Consolidated Income Statement Year Ended December 31, 20X3 0 Total expenses Consolidated net income 0 Income to controlling interest $ 0 PROUD CORPORATION AND SUBSIDIARY Consolidated Retained Earnings Statement Year Ended December 31, 20X3 Retained Earnings, January 1, 20X3 Income to Controlling Interest, 20X3 $ Dividends Declared, 20X3 Retained Earnings, December 31, 20X3 0