Pepsi Co., which is a calendar-year-reporting company, purchased 90% of the common stock of Sprite Co. for
Question:
Pepsi Co., which is a calendar-year-reporting company, purchased 90% of the common stock of Sprite Co. for $270,000 on 1/1/20. On the acquisition date, the net assets of Sprite approximated their fair values of $300,000. Each company’s financial statements for the year ended 12/31/20 are presented on the Illustration #3a Worksheet which is included as a link with this assignment. Required: When submitting this assignment, both requirements below should be included on the excel worksheet provided. a. Present the journal entries made by Pepsi during 2020 to reflect the acquisition of Sprite and the equity method of accounting. b. Complete the “Illustration #3a Worksheet” to show the consolidation of Pepsi and Sprite on 12/31/20.
Introduction to Financial Accounting
ISBN: 978-0133251036
11th edition
Authors: Charles Horngren, Gary Sundem, John Elliott, Donna Philbrick