Second Journal Entry requires Recording the optional accumulated depreciation consolidation entry.

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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 $60,000 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 $ 105,000 300,000 15,000 75,000 10,000 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 $173,000 500,000 136,000 25,000 105,000 40,000 $175,000 50,000 100,000 200,000 230,000 200,000 24,000 $979,000 $979,000 $ 75,000 40,000 120,000 100,000 50,000 120,000 $505,000 $505,000 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.) view transaction list Consolidation Worksheet Entries Record the basic consolidation entry. Note: Enter debits before credits. Accounts Debit Credit Event 1 vecember 31, ZUAS Consolidation Entries Proud Corp. Spirited Co. DR CR Consolidated Income Statement Sales Less: Depreciation expense Less: Other expenses Income from Spirited Co. Consolidated Net Income $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 NCI in Net income Controlling Interest in Net Income Statement of Retained Earnings Beginning balance Net income 0 0 0 0 0 Less: Dividends declared Ending Balance $ 0 $ 0 $ 0 $ 0 $ 0 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 $ 0 $ 0 $ 0 $ 0 $ 0 0 0 0 0 0 Retained earnings NCI in NA of Spirited Co. Total Liabilities and Equity $ 0 $ 0 $ 0 $ 0 $ 0 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 Total Assets $ 0 Liabilities Stockholders' Equity: Controlling Interest: Total Controlling Interest 0 0 Total Stockholder's equity Total Liabilities and Stockholders' Equity $ 0 PROUD CORPORATION AND SUBSIDIARY Consolidated Income Statement Year Ended December 31, 20X3 Total expenses 0 Consolidated net income 0 Income to controlling interest $ 0 PROUD CORPORATION AND SUBSIDIARY Consolidated Retained Earnings Statement Year Ended December 31, 20X3 Retained Earnings, January 1, 20X3 Income to Controlling Interest, 20X3 $ 0 Dividends Declared, 20X3 Retained Earnings, December 31, 20X3