Pie Corporation acquired 75 percent of Slice Company's ownership on January 1, 20X8, for $93,000. At that date, the fair value of thenoncontrolling interest was $31,000. The book value of Slice's net assets at acquisition was $90,000. The book values and fair valuesof Slice's assets and liabilities were equal, except for Slice's buildings and equipment, which were worth $18,000 more than bookvalue. Accumulated depreciation on the buildings and equipment was $27,000 on the acquisition date. Buildings and equipment aredepreciated 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 Sliceshares had been impaired and the correct carrying amount was $2,900. Goodwill and goodwill impairment were assignedproportionately to the controlling and noncontrolling shareholders.Trial balance data for Pie and Slice on December 31, 20X8, are as follows:ItemCashAccounts ReceivableInventoryLandBuildings and EquipmentInvestment in Slice CompanyCost of Goods SoldWage ExpenseDepreciation ExpenseInterest ExpenseOther ExpensesDividends DeclaredAccumulated DepreciationAccounts PayableWages PayableNotes PayableCommon StockRetained EarningsSalesIncome from Slice CompanyPie CorporationDebit$ 51,50090,000110,00037,000361,000101,775117,00035,00024,00011,00012,50031,000$ 981,775Credit$ 139,00042,00015,000203,450200,000102,000260,00020,325$ 981,775Slice CompanyDebit$ 28,00019,00032,00022,000164,000102,00026,0009,0003,0004,00015,400$ 424,400Credit$ 36,00014,00010,00088,40054,00036,000186,000$424,400Required:a. Record all consolidation entries needed to prepare a three-part consolidation worksheet as of December 20X8.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

The consolidation is a form of investment accounting which is used for integrating as well as…

Answered: ildings and equipment was $27,000 on…

ildings and equipment was $27,000 on the acquisition date. Buil nagement of Pie concluded at December 31, 20X8, that goodwill carrying amount was $2,900. Goodwill and goodwill impairment

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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