Problem $4-35($Static$)$ Comprehensive Problem: Wholly Owned Subsidiary LO $4-5$

Prime Corporation acquired $100$ percent ownership of Steak Products Company on January $1,20\backslash$times $1,$ for $$200,000.$ On that date, Steak reported retained earnings of $$50,000$ and had $$100,000$ of common stock outstanding. Prime has used the equity method in accounting for its investment in Steak.

The trial balances for the two companies on December $31,20$X$5,$ appear below:

$\backslash$table$[[$Item$,$Prime Corporation,Steak Products Company$],[$Debit$,$Credit,Debit,Credit$],[$Cash and Receivables,$ $43,000,,$$ $65,000,],[$Inventory$,260,000,,90,000,],[$Land$,80,000,,80,000,],[$Buildings and Equipment,$500,000,,150,000,],[$Investment in Steak Products,$235,000,,,],[$Cost of Goods Sold,$120,000,,50,000,],[$Depreciation Expense,$25,000,,15,000,],[$Inventory Losses,$15,000,,5,000,],[$Dividends Declared,$30,000,,10,000,],[$Accumulated Depreciation,,$ $205,000,,$$ $105,000],[$Accounts Payable,,$60,000,,20,000],[$Notes Payable,,$200,000,,50,000],[$Common Stock,,$300,000,,100,000],[$Retained Earnings,,$318,000,,90,000],[$Sales$,,200,000,,100,000],[$Income from Steak Products,,$25,000,,],[,$$$1,308,000,$$ $1,308,000,$$$465,000,$$ $465,000]]$

Additional Information:

On the date of combination $($five years ago$),$ the fair value of Steak's depreciable assets was $$50,000$ more than the book value. Accumulated depreciation at that

Required:

a$.$ Prepare all journal entries that Prime recorded during $205$ related to its investment in Steak.

b$.$ Prepare all consolidation entries needed to prepare consolidated statements for $20$X$5.$

c$.$ Prepare a three$-$part worksheet as of December $31,205.$

Complete this question by entering your answers in the tabs below.

Prepare all journal entries that Prime recorded during $20$X$5$ related to its investment in Steak.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.

Journal entry worksheet

Record Prime Corporation's $100\%$ share of Steak Products' $205$ income.

Note: Enter debits before credits.date was $$10,000.$ The differential assigned to depreciable assets should be written off over the following $10-$year period.

There was $$10,000$ of intercorporate receivables and payables at the end of $205.$