Pie Corporation acquired 75 percent of Slice Company's ownership on January 1, 20X8, for $96,000. At that date, the fair value of the noncontrolling interest was $32,000. The book value of Slice's net assets at acquisition was $93,000. The book values and fair values of Slice's assets and liabilities were equal, except for Slice's buildings and equipment, which were worth $18,600 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 $2,800. 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: Item Cash Pic Corporation Debit Credit slice Company Debit Credit $ 49,500 $ 30,000 Inventory Land Accounts Receivable Buildings and Equipment 71,000 21,000 91,000 34,000 44,000 24,000 355,000 166,000 Investment in Slice Company Cost of Goods Sold Wage Expense Depreciation Expense 184,355 120,000 105,000 41,000 24,000 22,000 9,000 Interest Expense Other Expenses 9,000 10,500 3,000 4,000 Dividends Declared 36,000 15,400 Accumulated Depreciation Accounts Payable $ 133,000 31,000 $ 36,000 15,000 Wages Payable 16,000 11,000 Notes Payable 287,450 93,400 Common Stock 189,000 Retained Earnings 91,000 Sales Income from slice Company 266,000 19,905 66,000 27,000 187,000 $ 953,355 $ 953,355 $ 435,400 $ 435,400 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. Answer is complete but not entirely correct. No Entry Accounts Debit Credit A 1 Common stock 66,000 Retained earnings 0 27,000 Income from Slice Company 0 31,500 NCI in Net Income of Slice Company 0 10,500 15,400 Dividends declared Investment in Slice Company 0 89,700 NCI in Net assets of Slice Company ✔ 29,900 B 2 Depreciation expense Goodwill impairment loss Income from Slice Company NCI in Net Income of Slice Company 1,860 13,300x 0 11,325 0 3,775x C 3 Buildings and equipment Goodwill D 4 Accumulated depreciation Investment in Slice Company NCI in Net assets of Slice Company Accumulated depreciation ° 18,600 6 6 6 6 2,700 x 1,860 14,175x 4,725 27,000
Pie Corporation acquired 75 percent of Slice Company's ownership on January 1, 20X8, for $96,000. At that date, the fair value of the noncontrolling interest was $32,000. The book value of Slice's net assets at acquisition was $93,000. The book values and fair values of Slice's assets and liabilities were equal, except for Slice's buildings and equipment, which were worth $18,600 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 $2,800. 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: Item Cash Pic Corporation Debit Credit slice Company Debit Credit $ 49,500 $ 30,000 Inventory Land Accounts Receivable Buildings and Equipment 71,000 21,000 91,000 34,000 44,000 24,000 355,000 166,000 Investment in Slice Company Cost of Goods Sold Wage Expense Depreciation Expense 184,355 120,000 105,000 41,000 24,000 22,000 9,000 Interest Expense Other Expenses 9,000 10,500 3,000 4,000 Dividends Declared 36,000 15,400 Accumulated Depreciation Accounts Payable $ 133,000 31,000 $ 36,000 15,000 Wages Payable 16,000 11,000 Notes Payable 287,450 93,400 Common Stock 189,000 Retained Earnings 91,000 Sales Income from slice Company 266,000 19,905 66,000 27,000 187,000 $ 953,355 $ 953,355 $ 435,400 $ 435,400 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. Answer is complete but not entirely correct. No Entry Accounts Debit Credit A 1 Common stock 66,000 Retained earnings 0 27,000 Income from Slice Company 0 31,500 NCI in Net Income of Slice Company 0 10,500 15,400 Dividends declared Investment in Slice Company 0 89,700 NCI in Net assets of Slice Company ✔ 29,900 B 2 Depreciation expense Goodwill impairment loss Income from Slice Company NCI in Net Income of Slice Company 1,860 13,300x 0 11,325 0 3,775x C 3 Buildings and equipment Goodwill D 4 Accumulated depreciation Investment in Slice Company NCI in Net assets of Slice Company Accumulated depreciation ° 18,600 6 6 6 6 2,700 x 1,860 14,175x 4,725 27,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education