Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $146,000. On that date, the fair value of the noncontrolling interest was $36,500, and Slice reported retained earnings of $44,000 and had $92,000 of common stock outstanding. Pizza has used the equity method in accounting for its investment in Slice. Trial balance data for the two companies on December 31, 20X5, are as follows: Pizza Slice Products Company Debit $ 82,000 109,000 82,000 164,000 Corporation Debit Item Credit Credit Cash & Receivables Inventory Land Buildings & Equipment Investment in Slice Products Company Cost of Goods Sold Depreciation Expense Inventory Losses Dividends Declared Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings 88,000 277,000 82,000 507,000 176, 200 119, 000 20,000 10,000 44,000 44,000 10,000 6,000 22,000 $ 193,000 40,000 266,920 285,000 299,000 207,000 32,280 $1,323, 200 $1,323,200 $519,000 $519,000 $ 70,000 15,000 155,000 92,000 82,000 105,000 Sales Income from Slice Products Company Additional Information 1. On the date of combination, the fair value of Slice's depreciable assets was $46,500 more than book value. The accumulated depreciation on these assets was $10,000 on the acquisition date. The differential assigned to depreciable assets should be written off over the following 10-year period. 2. There was $12.000 of intercorporate receivables and payables at the end of 20X5.
Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $146,000. On that date, the fair value of the noncontrolling interest was $36,500, and Slice reported retained earnings of $44,000 and had $92,000 of common stock outstanding. Pizza has used the equity method in accounting for its investment in Slice. Trial balance data for the two companies on December 31, 20X5, are as follows: Pizza Slice Products Company Debit $ 82,000 109,000 82,000 164,000 Corporation Debit Item Credit Credit Cash & Receivables Inventory Land Buildings & Equipment Investment in Slice Products Company Cost of Goods Sold Depreciation Expense Inventory Losses Dividends Declared Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings 88,000 277,000 82,000 507,000 176, 200 119, 000 20,000 10,000 44,000 44,000 10,000 6,000 22,000 $ 193,000 40,000 266,920 285,000 299,000 207,000 32,280 $1,323, 200 $1,323,200 $519,000 $519,000 $ 70,000 15,000 155,000 92,000 82,000 105,000 Sales Income from Slice Products Company Additional Information 1. On the date of combination, the fair value of Slice's depreciable assets was $46,500 more than book value. The accumulated depreciation on these assets was $10,000 on the acquisition date. The differential assigned to depreciable assets should be written off over the following 10-year period. 2. There was $12.000 of intercorporate receivables and payables at the end of 20X5.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $146,000. On that date, the fair
value of the noncontrolling interest was $36,500, and Slice reported retained earnings of $44,000 and had $92,000 of common stock
outstanding. Pizza has used the equity method in accounting for its investment in Slice.
Trial balance data for the two companies on December 31, 20X5, are as follows:
Pizza
Slice
Corporation
Debit
$
Products Company
Debit
$ 82,000
109,000
82,000
164,000
Item
Credit
Credit
88,000
277,000
82,000
507,000
176, 200
119,000
20,000
10,000
44,000
Cash & Receivables
Inventory
Land
Buildings & Equipment
Investment in Slice Products Company
Cost of Goods Sold
Depreciation Expense
Inventory Losses
Dividends Declared
44,000
10,000
6,000
22,000
$ 193,000
Accumulated Depreciation
Accounts Payable
Notes Payable
Common Stock
40,000
266,920
285,000
299,000
207,000
32,280
$ 70,000
15,000
155,000
92,000
82,000
105,000
Retained Earnings
Sales
Income from Slice Products Company
$1,323, 200 $1,323,200 $519,000 $519,000
Additional Information
1. On the date of combination, the fair value of Slice's depreciable assets was $46,500 more than book value. The accumulated
depreciation on these assets was $10,000 on the acquisition date. The differential assigned to depreciable assets should be written
off over the following 10-year period.
2. There was $12,000 of intercorporate receivables and payables at the end of 20X5.
Transcribed Image Text:Required:
a. Prepare all journal entries that Pizza recorded during 20X5 related to its investment in Slice. (If no entry is required for a
transaction/event, select "No journal entry required" in the first account field.)
View transaction list
>
Record Pizza Corporation's 80% share of Slice Products
Company's 20X5 income.
A
X5
Record Pizza Corporation's 80% share of Slice Company's
20X5 dividend.
B
C Record the amortization of the excess acquisition price.
Credit
Note :
= journal entry has been entered
Record entry
Clear entry
View general journal
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