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 Credit Accounts Receivable Inventory Land $ 51,500 90,000 Slice Company Debit $ 28,000 Credit 19,000 110,000 32,000 37,000 22,000 Interest Expense Buildings and Equipment Investment in Slice Company Cost of Goods Sold Wage Expense Depreciation Expense Other Expenses 361,000 164,000 101,775 117,000 102,000 35,000 26,000 24,000 9,000 11,000 3,000 12,500 4,000 Dividends Declared 31,000 15,400 Accumulated Depreciation Accounts Payable $ 139,000 42,000 $ 36,000 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 Income from Slice Company $ 981,775 260,000 20,325 $ 981,775 186,000 $ 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. view transaction list transaction list Record the basic consolidation entry. Record the amortized excess value reclassification entry. Record the excess value (differential) reclassification entry. Record the optional accumulated depreciation consolidation entry. Note: journal entry has been entered Accumulated depreciation Investment in Slice Company NCI in Net assets of Slice Company D 4 Accumulated depreciation Buildings and equipment Debit Credit 54,000 36,000 18,400 15,400 22,500 27,000 27,000 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 Credit Accounts Receivable Inventory Land $ 51,500 90,000 Slice Company Debit $ 28,000 Credit 19,000 110,000 32,000 37,000 22,000 Interest Expense Buildings and Equipment Investment in Slice Company Cost of Goods Sold Wage Expense Depreciation Expense Other Expenses 361,000 164,000 101,775 117,000 102,000 35,000 26,000 24,000 9,000 11,000 3,000 12,500 4,000 Dividends Declared 31,000 15,400 Accumulated Depreciation Accounts Payable $ 139,000 42,000 $ 36,000 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 Income from Slice Company $ 981,775 260,000 20,325 $ 981,775 186,000 $ 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. view transaction list transaction list Record the basic consolidation entry. Record the amortized excess value reclassification entry. Record the excess value (differential) reclassification entry. Record the optional accumulated depreciation consolidation entry. Note: journal entry has been entered Accumulated depreciation Investment in Slice Company NCI in Net assets of Slice Company D 4 Accumulated depreciation Buildings and equipment Debit Credit 54,000 36,000 18,400 15,400 22,500 27,000 27,000
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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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