Pie Corporation acquired 60 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 40 percent of the total book value of Slice. Slice provided the following trial balance data at December 31, 20X5:   Debit Credit Cash $ 27,600   Accounts Receivable 64,900   Inventory 91,600   Buildings and Equipment (net) 216,000   Cost of Goods Sold 103,300   Depreciation Expense 24,450   Other Operating Expenses 31,060   Dividends Declared 15,800   Accounts Payable   $ 32,000 Notes Payable   127,000 Common Stock   94,800 Retained Earnings   130,000 Sales   190,910 Total $ 574,710 $ 574,710 Required: How much did Pie pay to purchase its shares of Slice? Note: Round your answer to nearest whole dollar amount. If consolidated financial statements are prepared at December 31, 20X5, what amount will be assigned to the noncontrolling interest in the consolidated balance sheet? Note: Round your answer to nearest whole dollar amount. If Pie reported income of $142,250 from its separate operations for 20X5, what amount of consolidated net income will be reported for 20X5?

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
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Pie Corporation acquired 60 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 40 percent of the total book value of Slice. Slice provided the following trial balance data at December 31, 20X5:

  Debit Credit
Cash $ 27,600  
Accounts Receivable 64,900  
Inventory 91,600  
Buildings and Equipment (net) 216,000  
Cost of Goods Sold 103,300  
Depreciation Expense 24,450  
Other Operating Expenses 31,060  
Dividends Declared 15,800  
Accounts Payable   $ 32,000
Notes Payable   127,000
Common Stock   94,800
Retained Earnings   130,000
Sales   190,910
Total $ 574,710 $ 574,710

Required:

  1. How much did Pie pay to purchase its shares of Slice?

    Note: Round your answer to nearest whole dollar amount.

  2. If consolidated financial statements are prepared at December 31, 20X5, what amount will be assigned to the noncontrolling interest in the consolidated balance sheet?

    Note: Round your answer to nearest whole dollar amount.

  3. If Pie reported income of $142,250 from its separate operations for 20X5, what amount of consolidated net income will be reported for 20X5?

  4. If Pie had purchased its ownership of Slice on January 1, 20X5, at underlying book value and Pie reported income of $142,250 from its separate operations for 20X5, what amount of consolidated net income would be reported for 20X5?

     

     
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