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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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
Transcribed Image Text: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
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