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 Accounts Receivable Inventory Land Buildings and Equipment Investment in Slice Company Cost of Goods Sold Wage Expense Depreciation Expense Interest Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Wages Payable Notes Payable Common Stock Retained Earnings Sales Income from Slice Company Pie Corporation Debit $ 51,500 90,000 110,000 37,000 361,000 101,775 117,000 35,000 24,000 11,000 12,500 31,000 $981,775 Credit $ 139,000 42,000 15,000 203,450 200,000 102,000 260,000 20,325 $981,775 Slice Company Debit $ 28,000 19,000 32,000 22,000 164,000 102,000 26,000 9,000 3,000 4,000 15,400 $424,400 Credit $ 36,000 14,000 10,000 88,400 54,000 36,000 186,000 $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.
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 Accounts Receivable Inventory Land Buildings and Equipment Investment in Slice Company Cost of Goods Sold Wage Expense Depreciation Expense Interest Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Wages Payable Notes Payable Common Stock Retained Earnings Sales Income from Slice Company Pie Corporation Debit $ 51,500 90,000 110,000 37,000 361,000 101,775 117,000 35,000 24,000 11,000 12,500 31,000 $981,775 Credit $ 139,000 42,000 15,000 203,450 200,000 102,000 260,000 20,325 $981,775 Slice Company Debit $ 28,000 19,000 32,000 22,000 164,000 102,000 26,000 9,000 3,000 4,000 15,400 $424,400 Credit $ 36,000 14,000 10,000 88,400 54,000 36,000 186,000 $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.
Chapter1: Financial Statements And Business Decisions
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