Pie Corporation acquired 80 percent of Slice Company's common stock on December 31, 20X5, at underlying book value. The book alues and fair values of Slice's assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 20 percent of the total book value of Slice. Slice provided the following trial balance data at December 31, 20X5: Cash Accounts Receivable Inventory Buildings and Equipment (net) Cost of Goods Sold Depreciation Expense Other Operating Expenses Dividends Declared Accounts Payable Notes Payable Common Stock Retained Earnings Sales Total Debit $ 28,000 65,000 90,000 210,000 105,000 24,000 31,000 15,000 $ 568,000 Required: a. How much did Pie pay to purchase its shares of Slice? Credit a. Purchase price b. Noncontrolling interest c. Consolidated net income d. Consolidated net income $ 33,000 120,000 90,000 130,000 195,000 $ 568,000 b. If consolidated financial statements are prepared December 31, 20X5, what amount will be assigned to the noncontrolling interest in the consolidated balance sheet? c. If Pie reported income of $143,000 from its separate operations for 20X5, what amount of consolidated net income will be reported for 20X5? d. If Pie had purchased its ownership of Slice on January 1, 20X5, at underlying book value and Pie reported income of $143,000 from its separate operations for 20X5, what amount of consolidated net income would be reported for 20X5?
Pie Corporation acquired 80 percent of Slice Company's common stock on December 31, 20X5, at underlying book value. The book alues and fair values of Slice's assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 20 percent of the total book value of Slice. Slice provided the following trial balance data at December 31, 20X5: Cash Accounts Receivable Inventory Buildings and Equipment (net) Cost of Goods Sold Depreciation Expense Other Operating Expenses Dividends Declared Accounts Payable Notes Payable Common Stock Retained Earnings Sales Total Debit $ 28,000 65,000 90,000 210,000 105,000 24,000 31,000 15,000 $ 568,000 Required: a. How much did Pie pay to purchase its shares of Slice? Credit a. Purchase price b. Noncontrolling interest c. Consolidated net income d. Consolidated net income $ 33,000 120,000 90,000 130,000 195,000 $ 568,000 b. If consolidated financial statements are prepared December 31, 20X5, what amount will be assigned to the noncontrolling interest in the consolidated balance sheet? c. If Pie reported income of $143,000 from its separate operations for 20X5, what amount of consolidated net income will be reported for 20X5? d. If Pie had purchased its ownership of Slice on January 1, 20X5, at underlying book value and Pie reported income of $143,000 from its separate operations for 20X5, what amount of consolidated net income would be reported for 20X5?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A-1
Transcribed Image Text:Pie Corporation acquired 80 percent of Slice Company's common stock on December 31, 20X5, at underlying book value. The book
values and fair values of Slice's assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 20
percent of the total book value of Slice. Slice provided the following trial balance data at December 31, 20X5:
Cash
Accounts Receivable
Inventory
Buildings and Equipment (net)
Cost of Goods Sold
Depreciation Expense
Other Operating Expenses
Dividends Declared
Accounts Payable
Notes Payable
Common Stock
Retained Earnings
Sales
Total
Debit
$ 28,000
65,000
90,000
210,000
105,000
24,000
31,000
15,000
$ 568,000
Required:
a. How much did Pie pay to purchase its shares of Slice?
a. Purchase price
b. Noncontrolling interest
c. Consolidated net income
d. Consolidated net income
Credit
$ 33,000
120,000
90,000
130,000
195,000
$ 568,000
b. If consolidated financial statements are prepared at December 31, 20X5, what amount will be assigned to the noncontrolling
interest in the consolidated balance sheet?
c. If Pie reported income of $143,000 from its separate operations for 20X5, what amount of consolidated net income will be reported
for 20X5?
d. If Pie had purchased its ownership of Slice on January 1, 20X5, at underlying book value and Pie reported income of $143,000 from
its separate operations for 20X5, what amount of consolidated net income would be reported for 20X5?
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