Extracted text: 1. On January 1, 20X7, Sword reported net assets with a book value of $124,000. A total of $21,000 of the acquisition price is applied to goodwill, which was not impaired in 20X7. 2. Sword's depreciable assets had an estimated economic life of 11 years on the date of combination. The difference between fair value and book value of tangible assets is related entirely to buildings and equipment. 3. Prince used the equity-method in accounting for its investment in Sword. 4. Detailed analysis of receivables and payables showed that Sword owed Prince $28,000 on December 31, 20X7. Required: a. Prepare all journal entries recorded by Prince with regard to its investment in Sword during 2OX7. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Extracted text: Prince Corporation acquired 100 percent of Sword Company on January 1, 20X7, for $178,000. The trial balances for the two companies on December 31, 20X7, included the following amounts: Prince Corporation Sword Company Item Debit Credit Debit Credit $ 34,000 66,000 118,000 29,000 157,000 Cash $ 93,000 61,000 175,000 91,000 494,000 228,000 494,000 23,000 60,000 69,000 Accounts Receivable Inventory Land Buildings and Equipment Investment in Sword Company Cost of Goods Sold Depreciation Expense other Expenses Dividends Declared 255,000 13,000 60,000 21,000 $ 151,000 59,000 181,000 294,000 342,000 690,000 71,000 $ 65,000 Accumulated Depreciation Accounts Payable Mortgages Payable Common Stock Retained Earnings 33,000 129,000 42,000 82,000 402,000 Sales Income from Sword Company $1,788,000 $1,788,000 $753,000 $753,000 Additional Information