Consolidation

Worksheet Entries

A

Record basic consolidation entry.

Note: Enter debits before credits. Pizza Corporation acquired $80$ percent ownership of Slice Products Company on January $1,20$X$1,$ for $\backslash (\backslash$$ $147,000\backslash ).$ On that date, the fair value of the noncontrolling interest was $\backslash$$$36,750,$ and Slice reported retained earnings of $\backslash$$$42,000$ and had $\backslash$$$95,000$ of common stock outstanding. Pizza has used the equity method in accounting for its investment in Slice.

Trial balance data for the two companies on December $31,20$X$5,$ are as follows:

$\backslash$begin$\{$tabular$\}\{|$l$|$l$|$l$|$l$|$l$|\}$

$\backslash$hline & $\backslash$multicolumn$\{2\}\{|$c$|\}\{$Pizza Corporation$\}$ & $\backslash$multicolumn$\{2\}\{|$l$|\}\{$Slice Products Company$\}\backslash \backslash$

$\backslash$hline Item & Debit & Credit & Debit & Credit $\backslash \backslash$

$\backslash$hline Cash and Receivables & $\backslash$$ $83,000$ & & $\backslash$$ $83,000$ & $\backslash \backslash$

$\backslash$hline Inventory & $280,000$ & & $109,000$ & $\backslash \backslash$

$\backslash$hline Land & $89,000$ & & $89,000$ & $\backslash \backslash$

$\backslash$hline Buildings and Equipment & $500,000$ & & $162,000$ & $\backslash \backslash$

$\backslash$hline Investment in Slice Products Company & $181,260$ & & & $\backslash \backslash$

$\backslash$hline Cost of Goods Sold & $115,000$ & & $42,000$ & $\backslash \backslash$

$\backslash$hline Depreciation Expense & $22,000$ & & $12,000$ & $\backslash \backslash$

$\backslash$hline Inventory Losses & $12,000$ & & $6,000$ & $\backslash \backslash$

$\backslash$hline Dividends Declared & $43,000$ & & $22,800$ & $\backslash \backslash$

$\backslash$hline Accumulated Depreciation & & $\backslash$$ $192,000$ & & $\backslash$$ $84,06\backslash \backslash$

$\backslash$hline Accounts Payable & & $51,000$ & & $13,06\backslash \backslash$

$\backslash$hline Notes Payable & & $254,200$ & & $142,86\backslash \backslash$

$\backslash$hline Common Stock & & $286,000$ & & $95,06\backslash \backslash$

$\backslash$hline Retained Earnings & & $300,000$ & & $85,06\backslash \backslash$

$\backslash$hline Sales & & $209,000$ & & $106,06\backslash \backslash$

$\backslash$hline Income from Slice Products Company & & $33,060$ & & $\backslash \backslash$

$\backslash$hline & $\backslash$$ $1,325,260$ & $\backslash$$ $1,325,260$ & $\backslash$$ $525,800$ & $\backslash$$ $525,86\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

Additional Information

$1.$ On the date of combination, the fair value of Slice's depreciable assets was $\backslash (\backslash$$ $46,750\backslash )$ more than book value. The accumulated depreciation on these assets was $\backslash (\backslash$$ $10,000\backslash )$ on the acquisition date. The differential assigned to