Pillow Corporation acquired 80 percent ownership of Sheet Company on January 1, 20X7, for $173,000. At...

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Pillow Corporation acquired 80 percent ownership of Sheet Company on January 1, 20X7, for $173,000. At that date, the fair value of the noncontrolling interest was $43,250. The trial balances for the two companies on December 31, 20X7, included the following amounts: Item Pillow Corporation Debit Sheet Company Credit Debit Credit Cash $ 38,000 $ 25,000 Accounts Receivable 50,000 55,000 Inventory 240,000 100,000 Land 80,000 20,000 Buildings and Equipment 500,000 150,000 Investment in Sheet Company 202,000 Cost of Goods Sold 500,000 250,000 Depreciation Expense 25,000 15,000 Other Expenses Dividends Declared Accumulated Depreciation. Accounts Payable Mortgages Payable 75,000 75,000 50,000 20,000 $ 155,000 $ 75,000 70,000 35,000 200,000 50,000 Common Stock Retained Earnings Sales Income from Sheet Company 300,000 50,000 290,000 100,000 700,000 400,000 $1,760,000 45,000 $1,760,000 $710,000 $710,000 C 1. On January 1, 20X7, Sheet reported Buildings and Equipment with a book value of $150,000 and a fair value of $191,250. Accumulated depreciation on Buildings and Equipment was $60,000 on the acquisition date. 2. Sheet's depreciable assets had an estimated economic life of 11 years on the date of combination. Goodwill of $25,000 was recorded at the acquisition. 3. Pillow used the equity method in accounting for its investment in Sheet. 4. Detailed analysis of receivables and payables showed that Sheet owed Pillow $16,000 on December 31, 20X7. led by Pillow with regard to its investment in Sheet during 20X7. a transn/event, select "No journal entry required" in the first account field. Additional Information Answer is complete but not entirely correct. Record the initial investment in Sheet Company. Record Pillow Corporation's 80% share of Sheet Company's 20X7 income. No A Event General Journal Debit Credit 1 Investment in Sheet Company Cash 173,000 173,000 Record Pillow Corporation's 80% share of Sheet Company's 20X7 dividend. B 2 Investment in Sheet Company Income from Sheet Company 32,000 > 32,000 Record the amortization of the excess acquisition price. 3 Cash 16,000 Investment in Sheet Company 16,000 D 4 Income from Sheet Company 3,750 Note: journal entry has been entered Investment in Sheet Company 3,750 Pillow Corporation acquired 80 percent ownership of Sheet Company on January 1, 20X7, for $173,000. At that date, the fair value of the noncontrolling interest was $43,250. The trial balances for the two companies on December 31, 20X7, included the following amounts: Item Pillow Corporation Debit Sheet Company Credit Debit Credit Cash $ 38,000 $ 25,000 Accounts Receivable 50,000 55,000 Inventory 240,000 100,000 Land 80,000 20,000 Buildings and Equipment 500,000 150,000 Investment in Sheet Company 202,000 Cost of Goods Sold 500,000 250,000 Depreciation Expense 25,000 15,000 Other Expenses Dividends Declared Accumulated Depreciation. Accounts Payable Mortgages Payable 75,000 75,000 50,000 20,000 $ 155,000 $ 75,000 70,000 35,000 200,000 50,000 Common Stock Retained Earnings Sales Income from Sheet Company 300,000 50,000 290,000 100,000 700,000 400,000 $1,760,000 45,000 $1,760,000 $710,000 $710,000 C 1. On January 1, 20X7, Sheet reported Buildings and Equipment with a book value of $150,000 and a fair value of $191,250. Accumulated depreciation on Buildings and Equipment was $60,000 on the acquisition date. 2. Sheet's depreciable assets had an estimated economic life of 11 years on the date of combination. Goodwill of $25,000 was recorded at the acquisition. 3. Pillow used the equity method in accounting for its investment in Sheet. 4. Detailed analysis of receivables and payables showed that Sheet owed Pillow $16,000 on December 31, 20X7. led by Pillow with regard to its investment in Sheet during 20X7. a transn/event, select "No journal entry required" in the first account field. Additional Information Answer is complete but not entirely correct. Record the initial investment in Sheet Company. Record Pillow Corporation's 80% share of Sheet Company's 20X7 income. No A Event General Journal Debit Credit 1 Investment in Sheet Company Cash 173,000 173,000 Record Pillow Corporation's 80% share of Sheet Company's 20X7 dividend. B 2 Investment in Sheet Company Income from Sheet Company 32,000 > 32,000 Record the amortization of the excess acquisition price. 3 Cash 16,000 Investment in Sheet Company 16,000 D 4 Income from Sheet Company 3,750 Note: journal entry has been entered Investment in Sheet Company 3,750