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
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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 20X8.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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