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 $40,000 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: Spirited Company Debit Credit $120,000 302,000 10,000 71,000 24,400 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 $175,000 501,000 119,680 20,000 96,000 45,000 $169,000 30,000 106,280 187,000 217,000 209,000 38,400 $956,680 $956,680 $ 50,000 20,000 202,400 88,000 38,000 129,000 $527,400 $527,400 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 0 Total Stockholder's equity PROUD CORPORATION AND SUBSIDIARY Consolidated Income Statement Year Ended December 31, 20X3 0 Total expenses Consolidated net income 0 Income to controlling interest $ HA 0 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 $40,000 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: Spirited Company Debit Credit $120,000 302,000 10,000 71,000 24,400 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 $175,000 501,000 119,680 20,000 96,000 45,000 $169,000 30,000 106,280 187,000 217,000 209,000 38,400 $956,680 $956,680 $ 50,000 20,000 202,400 88,000 38,000 129,000 $527,400 $527,400 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 0 Total Stockholder's equity PROUD CORPORATION AND SUBSIDIARY Consolidated Income Statement Year Ended December 31, 20X3 0 Total expenses Consolidated net income 0 Income to controlling interest $ HA 0