Pie Corporation acquired 75 percent of Slice Company's ownership on January 1, 20X8, for $93,000. At...
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Pie Corporation acquired 75 percent of Slice Company's ownership on January 1, 20X8, for $93,000. At that date, the fair value of the noncontrolling interest was $31,000. The book value of Slice's net assets at acquisition was $90,000. The book values and fair values of Slice's assets and liabilities were equal, except for Slice's buildings and equipment, which were worth $18,000 more than book value. Accumulated depreciation on the buildings and equipment was $27,000 on the acquisition date. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, the management of Pie concluded at December 31, 20X8, that goodwill from its purchase of Slice shares had been impaired and the correct carrying amount was $2,900. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders. Trial balance data for Pie and Slice on December 31, 20X8, are as follows: Item Cash Pie Corporation Debit $ 51,500 Credit Slice Company Debit Credit $ 28,000 Accounts Receivable 90,000 19,000 Inventory 110,000 32,000 Land 37,000 22,000 Buildings and Equipment 361,000 164,000 Investment in Slice Company 101,775 Cost of Goods Sold 117,000 102,000 Wage Expense 35,000 26,000 Depreciation Expense 24,000 9,000 Interest Expense 11,000 3,000 Other Expenses 12,500 4,000 Dividends Declared 31,000 15,400 Accumulated Depreciation $ 139,000 $ 36,000 Accounts Payable 42,000 14,000 Wages Payable 15,000 10,000 Notes Payable 203,450 88,400 Common Stock 200,000 54,000 Retained Earnings 102,000 36,000 Sales 260,000 186,000 Income from Slice Company 20,325 $ 981,775 $ 981,775 $ 424,400 $ 424,400 Required: a. Record all consolidation entries needed to prepare a three-part consolidation worksheet as of December 31, 20X8. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Pie Corporation acquired 75 percent of Slice Company's ownership on January 1, 20X8, for $93,000. At that date, the fair value of the noncontrolling interest was $31,000. The book value of Slice's net assets at acquisition was $90,000. The book values and fair values of Slice's assets and liabilities were equal, except for Slice's buildings and equipment, which were worth $18,000 more than book value. Accumulated depreciation on the buildings and equipment was $27,000 on the acquisition date. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, the management of Pie concluded at December 31, 20X8, that goodwill from its purchase of Slice shares had been impaired and the correct carrying amount was $2,900. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders. Trial balance data for Pie and Slice on December 31, 20X8, are as follows: Item Cash Pie Corporation Debit $ 51,500 Credit Slice Company Debit Credit $ 28,000 Accounts Receivable 90,000 19,000 Inventory 110,000 32,000 Land 37,000 22,000 Buildings and Equipment 361,000 164,000 Investment in Slice Company 101,775 Cost of Goods Sold 117,000 102,000 Wage Expense 35,000 26,000 Depreciation Expense 24,000 9,000 Interest Expense 11,000 3,000 Other Expenses 12,500 4,000 Dividends Declared 31,000 15,400 Accumulated Depreciation $ 139,000 $ 36,000 Accounts Payable 42,000 14,000 Wages Payable 15,000 10,000 Notes Payable 203,450 88,400 Common Stock 200,000 54,000 Retained Earnings 102,000 36,000 Sales 260,000 186,000 Income from Slice Company 20,325 $ 981,775 $ 981,775 $ 424,400 $ 424,400 Required: a. Record all consolidation entries needed to prepare a three-part consolidation worksheet as of December 31, 20X8. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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Related Book For
Advanced Financial Accounting
ISBN: 9781265042615
13th International Edition
Authors: Theodore E. Christensen, David M. Cottrell, Cassy Budd
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