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 during 20X3. On December 31, 20X3, the trial balances of the two companies are as follows Proud Corporation Spirited Company Iten Debit Credit Debit Credit Current Assets $190.000 $107.000 Depreciable Assets 501,600 300,000 Investment in Spirited Company 126,240 Depreciation Expense 22,000 12,000 Other Expenses 96.000 72,000 Dividends Declared 42.000 17,200 Accumulated Depreciation $160,000 560,000 Current Liabilities 40,000 36,000 Long Tere Debt 129.40 157,200 Co Stock 186,000 95,000 rained Earnings 216.000 43,00 200.000 133,00 Inc fpirited Company 21200 37.40 1992.140 5512,200 $512,200 Required Prequest consolidnon entries required as of December 31, 20x3 to prepare consolidated financial statements. (If no entry is required for transaction/event, select "No journal entry required" in the first account field.) Answer is not complete Accounts NO Ever Credi Club 53000 Sales Income from Spirited Company AU, 216,000 209,000 31,200 $977,240 43,000 123,000 5977,240 $512,200 $512,200 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 not complete. No Event 1 Credit Accounts Common stock Retained earnings Income from Spirited Company NCI INI of Spirited Company Dividends declared Investment in Spirited Company NCHI NA of Spirited Company 000.00 Debit 93,000 43.000 31200 7.2003 17 200 126 240 B 2 Accumulated depreciation Depreciable asset 16.000 36.000 b. Prepare a three-part consolidation worksheet. (Values in the first two columns (the "parent" and "subsldiary" 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, comblne 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, 20X3 Consolidation Entries Proud Corp Spirited Co. DR CR Income Statement Sales Less Depreciation expense Less: Other expenses Income from Spinted Co Consolidated Net Income 5 05 0 $ OS NCT in Net income Controlling Interest in Net Income 5 os 0 $ OS Statement of Retained Earnings Beginning balance Net income 0 0 Less Dividends declared Ending Balance $ 05 5 5 Balance Sheet os 0 0 $ 0 0 05 Deprecate Les como erection Total Assets Liabilities and Equity 03 Os Long Coro Total Land Buy c. Prepare a consolidated balance sheet, income statement, and retained earnings statement for 20x3. (Amounts to be deducted should be indicated with a minus sign.) PROUD CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X3 Assets 0 $ 0 Total Assets Liabilities Stockholders' Equity Controlling Interest Total Controlling Interest Total Stockholder's equity Total Liabilities and Stockholders' Equity _con=con&external_browser=0&launchUrl=https%253A%252F%25. chapter 5 0 Saved PROUD CORPORATION AND SUBSIDIARY Consolidated Income Statement Year Ended December 31, 20X3 Total expenses Consolidated net income 0 0 Income to controlling interest $ 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 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 during 20X3. On December 31, 20X3, the trial balances of the two companies are as follows Proud Corporation Spirited Company Iten Debit Credit Debit Credit Current Assets $190.000 $107.000 Depreciable Assets 501,600 300,000 Investment in Spirited Company 126,240 Depreciation Expense 22,000 12,000 Other Expenses 96.000 72,000 Dividends Declared 42.000 17,200 Accumulated Depreciation $160,000 560,000 Current Liabilities 40,000 36,000 Long Tere Debt 129.40 157,200 Co Stock 186,000 95,000 rained Earnings 216.000 43,00 200.000 133,00 Inc fpirited Company 21200 37.40 1992.140 5512,200 $512,200 Required Prequest consolidnon entries required as of December 31, 20x3 to prepare consolidated financial statements. (If no entry is required for transaction/event, select "No journal entry required" in the first account field.) Answer is not complete Accounts NO Ever Credi Club 53000 Sales Income from Spirited Company AU, 216,000 209,000 31,200 $977,240 43,000 123,000 5977,240 $512,200 $512,200 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 not complete. No Event 1 Credit Accounts Common stock Retained earnings Income from Spirited Company NCI INI of Spirited Company Dividends declared Investment in Spirited Company NCHI NA of Spirited Company 000.00 Debit 93,000 43.000 31200 7.2003 17 200 126 240 B 2 Accumulated depreciation Depreciable asset 16.000 36.000 b. Prepare a three-part consolidation worksheet. (Values in the first two columns (the "parent" and "subsldiary" 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, comblne 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, 20X3 Consolidation Entries Proud Corp Spirited Co. DR CR Income Statement Sales Less Depreciation expense Less: Other expenses Income from Spinted Co Consolidated Net Income 5 05 0 $ OS NCT in Net income Controlling Interest in Net Income 5 os 0 $ OS Statement of Retained Earnings Beginning balance Net income 0 0 Less Dividends declared Ending Balance $ 05 5 5 Balance Sheet os 0 0 $ 0 0 05 Deprecate Les como erection Total Assets Liabilities and Equity 03 Os Long Coro Total Land Buy c. Prepare a consolidated balance sheet, income statement, and retained earnings statement for 20x3. (Amounts to be deducted should be indicated with a minus sign.) PROUD CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X3 Assets 0 $ 0 Total Assets Liabilities Stockholders' Equity Controlling Interest Total Controlling Interest Total Stockholder's equity Total Liabilities and Stockholders' Equity _con=con&external_browser=0&launchUrl=https%253A%252F%25. chapter 5 0 Saved PROUD CORPORATION AND SUBSIDIARY Consolidated Income Statement Year Ended December 31, 20X3 Total expenses Consolidated net income 0 0 Income to controlling interest $ 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