Pie Corporation acquired 75 percent of Slice Company's ownership on January 1, 20X8, for $90,000. At that date, the fair value of the noncontrolling interest was $30,000. The book value of Slice's net assets at acquisition was $87,000. The book values and fair values of Slice's assets and liabilities were equal, except for Slice's buildings and equipment, which were worth $17,400 more than book value. Accumulated depreciation on the buildings and equipment was $24,000 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 $2,800. 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: Pie Corporation Slice Company Land Item Cash Accounts Receivable Inventory Buildings and Equipment Debit $ 47,500 Credit Debit Credit $ 24,000 71,000 15,000 91,000 28,000 42,000 18,000 366,000 157,000 Investment in Slice Company 94,995 Cost of Goods Sold 124,000 109,000 Wage Expense 33,000 22,000 Depreciation Expense 24,000 8,000 Interest Expense 11,000 2,000 Other Expenses 12,500 3,000 Dividends Declared 39,000 17,800 Accumulated Depreciation $ 136,000 $ 32,000 Accounts Payable 41,000 15,000 Wages Payable 16,000 11,000 Notes Payable 200,650 75,800 Common Stock 189,000 66,000 Retained Earnings 91,000 21,000 Sales Income from Slice Company $ 955,995 264,000 18,345 $ 955,995 183,000 $ 403,800 $ 403,800 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. 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. Answer is not complete. No A Entry 1 Accounts Common stock B 2 Retained earnings Depreciation expense Goodwill impairment loss с 3 Buildings and equipment Goodwill D 4 Accumulated depreciation Buildings and equipment Debit Credit 66,000 21,000 1,740 12,800 17,400 2,800 24,000 24,000 b. Prepare a three-part consolidation worksheet for 20X8. Note: Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Income Statement Sales Less: COGS Less: Wage expense Less: Depreciation expense Less: Interest expense Less: Other expenses Less: Impairment loss Income from Slice Company Consolidated net income NCI in net income Controlling Interest in Net Income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Balance Sheet Cash Accounts receivable Inventory Land Buildings and equipment Less: Accumulated depreciation Investment in Slice Company Goodwill Total Assets Accounts payable Wages payable Notes payable Common stock Retained earnings NCI in NA of Slice Company * Answer is not complete. $ 264,000 $ 183,000 (124,000) (109,000) (33,000) (22,000) (24,000) (8,000) 1,740 (11,000) (2,000) (12,500) (3,000) (12,800) (12,800) x $ 447,000 (233,000) (55,000) (33,740) (13,000) (2,700) (12,800) (955,995) X (403,800) $ (909,295) $ (364,800) $ (11,060) $ 0 $ 96,760 0 $ (909,295) $ (364,800) $ (11,060) $ 0 $ 96,760 (1,350) (19,150) $ 0 $ 0 $ (19,150) (17,800) $ (17,800) $ (1,350) $ 47,500 $ 24,000 $ 71,500 71,000 15,000 86,000 91,000 18,000 109,000 42,000 18,000 60,000 366,000 157,000 136,000 × 94,995 32,000 > (6,600) > (22,260) X (121,695) > 2,800 516,400 145,740 2,800 $ 848,495 $ 264,000 $ (147,755) $ 0 $ 991,440 $ 41,000 $ 15,000 $ 56,000 16,000 11,000 27,000 200,650 75,800 276,450 189,000 66,000 (66,000) 321,000 40,565 (40,565) Total Liabilities and Equity $ 446,650 167,800 $ (25,435) 0 $ 639,885
Pie Corporation acquired 75 percent of Slice Company's ownership on January 1, 20X8, for $90,000. At that date, the fair value of the noncontrolling interest was $30,000. The book value of Slice's net assets at acquisition was $87,000. The book values and fair values of Slice's assets and liabilities were equal, except for Slice's buildings and equipment, which were worth $17,400 more than book value. Accumulated depreciation on the buildings and equipment was $24,000 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 $2,800. 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: Pie Corporation Slice Company Land Item Cash Accounts Receivable Inventory Buildings and Equipment Debit $ 47,500 Credit Debit Credit $ 24,000 71,000 15,000 91,000 28,000 42,000 18,000 366,000 157,000 Investment in Slice Company 94,995 Cost of Goods Sold 124,000 109,000 Wage Expense 33,000 22,000 Depreciation Expense 24,000 8,000 Interest Expense 11,000 2,000 Other Expenses 12,500 3,000 Dividends Declared 39,000 17,800 Accumulated Depreciation $ 136,000 $ 32,000 Accounts Payable 41,000 15,000 Wages Payable 16,000 11,000 Notes Payable 200,650 75,800 Common Stock 189,000 66,000 Retained Earnings 91,000 21,000 Sales Income from Slice Company $ 955,995 264,000 18,345 $ 955,995 183,000 $ 403,800 $ 403,800 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. 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. Answer is not complete. No A Entry 1 Accounts Common stock B 2 Retained earnings Depreciation expense Goodwill impairment loss с 3 Buildings and equipment Goodwill D 4 Accumulated depreciation Buildings and equipment Debit Credit 66,000 21,000 1,740 12,800 17,400 2,800 24,000 24,000 b. Prepare a three-part consolidation worksheet for 20X8. Note: Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Income Statement Sales Less: COGS Less: Wage expense Less: Depreciation expense Less: Interest expense Less: Other expenses Less: Impairment loss Income from Slice Company Consolidated net income NCI in net income Controlling Interest in Net Income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Balance Sheet Cash Accounts receivable Inventory Land Buildings and equipment Less: Accumulated depreciation Investment in Slice Company Goodwill Total Assets Accounts payable Wages payable Notes payable Common stock Retained earnings NCI in NA of Slice Company * Answer is not complete. $ 264,000 $ 183,000 (124,000) (109,000) (33,000) (22,000) (24,000) (8,000) 1,740 (11,000) (2,000) (12,500) (3,000) (12,800) (12,800) x $ 447,000 (233,000) (55,000) (33,740) (13,000) (2,700) (12,800) (955,995) X (403,800) $ (909,295) $ (364,800) $ (11,060) $ 0 $ 96,760 0 $ (909,295) $ (364,800) $ (11,060) $ 0 $ 96,760 (1,350) (19,150) $ 0 $ 0 $ (19,150) (17,800) $ (17,800) $ (1,350) $ 47,500 $ 24,000 $ 71,500 71,000 15,000 86,000 91,000 18,000 109,000 42,000 18,000 60,000 366,000 157,000 136,000 × 94,995 32,000 > (6,600) > (22,260) X (121,695) > 2,800 516,400 145,740 2,800 $ 848,495 $ 264,000 $ (147,755) $ 0 $ 991,440 $ 41,000 $ 15,000 $ 56,000 16,000 11,000 27,000 200,650 75,800 276,450 189,000 66,000 (66,000) 321,000 40,565 (40,565) Total Liabilities and Equity $ 446,650 167,800 $ (25,435) 0 $ 639,885
Chapter1: Financial Statements And Business Decisions
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