Proud Corporation acquired 80 percent of Spirited Companys 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 during 20X3. On December 31, 20X3, the trial balances of the two companies are as follows:

Proud Corporation. Spirited Company

Item Debit Credit Debit Credit

Current Assets $ 174,000 $ 107,000

Depreciable Assets 500,000 305,000

Investment in Spirited Company 131,680

Depreciation Expense 22,000 12,000

Other Expenses 105,000 67,000

Dividends Declared 49,000 20,400

Accumulated Depreciation $ 174,000 $ 60,000

Current Liabilities 35,000 25,000

Long-Term Debt 141,280 162,400

Common Stock 181,000 96,000

Retained Earnings 211,000 46,000

Sales 205,000 122,000

Income from Spirited Company 34,400

$ 981,680 $ 981,680 $ 511,400 $ 511,400

Required: a. Prepare all consolidation entries required as of December 31, 20X3, to prepare consolidated financial statements

Prepare the basic consolidation entry.

prepare the optional accumulated depreciation consolidation entry

prepare:

worksheet for consolidation financial statements

consolidated balance sheet

consolidated income statement

consolidated retained earnings statement