Prime Corporation acquired percent of Steak Companys voting shares on January X for $ in cash and marketable securities At that date, the noncontrolling interest had a fair value of $ and Steak reported net assets of $ Assume Prime uses the fully adjusted equity method. Trial balances for the two companies on December X are as follows:
Item Prime Corporation Steak Company
Debit Credit Debit Credit
Cash $ $
Accounts Receivable
Inventory
Buildings and Equipment
Investment in Steak Company
Cost of Goods Sold
Depreciation Expense
Other Expenses
Dividends Declared
Accumulated Depreciation $ $
Accounts Payable
Bonds Payable
Bond Premium
Common Stock
Additional Paidin Capital
Retained Earnings
Sales
Other Income
Income from Steak Company
Total $ $ $ $
Additional Information
The full amount of the differential at acquisition was assigned to buildings and equipment with a remaining year economic life.
Prime and Steak regularly purchase inventory from each other. During X Steak Company sold inventory costing $ to Prime Corporation for $ and Prime resold percent of the inventory in X and percent in X Also in X Prime sold inventory costing $ to Steak for $ Steak resold twothirds of the inventory in X and onethird in X
During X Steak sold inventory costing $ to Prime for $ and Prime sold items purchased for $ to Steak for $ Before the end of the year, Prime resold onethird of the inventory it purchased from Steak in X Steak continues to hold all the units purchased from Prime during X
Steak owes Prime $ on account on December X
Assume that both companies use straightline depreciation and that no property, plant, and equipment has been purchased since the acquisition.
Required:
