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 $48,000 on the acquisition date. Proud uses the equity method in accounting for its ownership of Spirited. On December 31, 20X4, the trial balances of the two companies are as follows: Spirited Company Debit Credit $169,000 318,000 12,000 90,000 19,000 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 $ 253,000 504,000 132,000 22,000 145,000 59,000 $ 197,000 67,000 111,000 194,000 278,000 236,000 32,000 $1,115,000 $1,115,000 $ 72,000 47,000 203,000 87,000 57,000 142,000 $608,000 $608,000 Required: a. Prepare all consolidation entries required on December 31, 20X4, to prepare consolidated financial statements. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list view transaction list Consolidation Worksheet Entries Record the optional accumulated depreciation consolidation entry. Note: Enter debits before credits. Event Accounts Debit Credit 2 Record entry Clear entry view consolidation entries b. Prepare a three-part consolidation worksheet as of December 31, 20X4. (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 PROUD CORPORATION AND SUBSIDIARY Worksheet for Consolidated Financial Statements December 31, 20X4 Consolidation Entries Proud Corp. Spirited Co. DR CR Income Statement Sales Less: Depreciation expense Less: Other expenses Income from Spirited Co. Consolidated Net Income NCI in net income Controlling Interest in Net Income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance 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