Question: Hello, I am trying to work this problem but it keeps saying it is incorrect. could someone help me please? Prince Corporation holds 75 percent





Prince Corporation holds 75 percent of the common stock of Sword Distributors Inc., purchased on December 31, 20x1 for $2.160,000 At the date of acquisition Sword reported common stock with a par value of $940.000 additional paid-in capital of $1.290,000, and retained earnings of $540,000. The fair value of the noncontrolling interest at acquisition was $720,000. The differential at acquisition was attributable to the following items Inventory (sold in 2ex2) Land Goodwill Total differential $ 27,500 38,500 44, eae $120,000 During 20x2, Prince soldi a plot of land that it had purchased several years before to Sword at a gain of S15.400 Sword continues to hold the land in 20X6. Prince and Sword entered into a five-year contract under which Prince provides management consulting services to Sword on a continuing basis: Sword pays Prince a fixed fee of $87.000 per year for these services At December 31, 20x8. Sword owed Prince $21750 as the final 20x8 quarterly payment under the contract On January 2, 20x8, Prince paid $260.000 to Sword to purchase equipment that Sword was then carrying at $300,000. Sword had purchased that equipment on December 27, 20X2 for $450,000. The equipment is expected to have a total 15-year life and no salvage value. The amount of the differential assigned to goodwill has not been impaired At December 31, 20X8, trial balances for Prince and Sword appeared as follows Check my work On January 2, 20x8, Prince paid $260.000 to Sword to purchase equipment that Sword was then carrying at $300.000 Sword had purchased that equipment on December 27, 20x2.for $450,000. The equipment is expected to have a total 15-year life and no salvage value. The amount of the differential assigned to goodwill has not been impaired. At December 31, 20x8, trial balances for Prince and Sword appeared as follows. Prince Corporation Item Sword Distributors Inc. Debit Credit Debit Credit Cash $ 64,700 $ 52.000 Current Receivables 128, Bee 108, 4ee Inventory 303,000 233,900 Investment in Sword Distributors 2,839,475 Land 415.00 1,207,200 Buildings & Equipment 2,450.000 3,000,000 Cost of Goods Sold 2.178.000 524.000 Depreciation & Amortization 195,000 77,000 Other Expenses 1,371,000 221.000 Dividends Declared 47,000 17,000 Accumulated Depreciation $2,086,000 $415.000 Current Payables 86,200 372,300 Bonds Payable 368,000 185.000 Common Stock 94,000 940,000 Additional Paid in Capital 1,266,000 1,290,000 Retained Earnings, January 1 1,466,800 1,340,000 4,889,725 987,000 Sales 99. eee 30,000 Other Income or Loss 128.250 Income from Sword Distributors As of December 31, 20x8, Sword had declared but not yet paid its fourth quarter dividend of $5,000 Both companies use straight-line depreciation and amortization Prince uses the fully adjusted equity method to account for its investment in Sword Required: a. Compute the amount of the differential as of January 1, 20x8 Remaining differential $ 82.500 b. Verify the balance in Prince's Investment in Sword Distributors account as of December 31, 20x8. S 1:458.000 Balance in ment in Sword Account c. Present ail consolidation entries that would appear in a three-part consolidation worksheet as of December 31, 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whole dollar amount.) view transaction list Consolidation Worksheet Entries A B C D E 11 F G > H Record the basic consolidation entry. Nato inters before credits Debit Credit Event Accounts
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