Illustration #$3$a

Pepsi Co$.,$ which is a calendar$-$year$-$reporting company, purchased $90\%$ of the common stock of Sprite Co$.$ for $$315,000$ on $\frac{1}{1}\frac{?}{23}.$ On the acquisition date, the net assets of Sprite approximated their fair values of $$300,000.$ Each company's financial statements for the year ended $\frac{12}{31}\frac{?}{23}$ are presented on the Illustration #$3$a Worksheet which is included as a link with this assignment.

Required:

When submitting this assignment, both requirements below should be included on the excel worksheet provided.

a$.$ Present the journal entries made by Pepsi during $2023$ to reflect the acquisition of Sprite and the equity method of accounting.

b$.$ Complete the "Illustration #$3$a Worksheet" to show the consolidation of Pepsi and Sprite on $\frac{12}{31}\frac{?}{23}.$

Acquisition Journal Entry:

Dr$.$ Investment in Spirit Co$.$