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 its ownership of Spirited. On December 31, 20X4, the trial balances of the two companies are as follows: Spirited Company Debit Credit $155,000 310,000 13,000 82,000 29,400 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 $ 238,000 517,000 151, 680 23,000 146,000 57,000 $ 199,000 67,800 121,280 193,000 277,000 233,000 42,400 $1,132,680 $1,132,680 $ 78,000 47,600 150,400 98,000 68,000 148,000 $589,400 $589,400 Consolidation Worksheet Entries Record the optional accumulated depreciation consolidation entry. Note: Enter debits before credits. Event Accounts Debit 2 Credit 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 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