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

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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13.)

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.
Transcribed Image Text: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
Transcribed Image Text: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
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