Putt Corporation acquired 70 percent of Slice Company’s voting common stock on January 1, 20X3, for $158,900. Slice reported common stock outstanding of $100,000 and retained earnings of $85,000. The fair value of the noncontrolling interest was $68,100 at the date of acquisition. Buildings and equipment held by Slice had a fair value $25,000 higher than book value. The remainder of the differential was assigned to a copyright held by Slice. Buildings and equipment had a 10-year remaining life and the copyright had a 5-year life at the date of acquisition.

Trial balances for Putt and Slice on December 31, 20X5, are as follows:

Putt sold land it had purchased for $21,000 to Slice on September 20, 20X4, for $32,000. Slice plans to use the land for future plant expansion.
On January 1, 20X5, Slice sold equipment to Putt for $91,600. Slice purchased the equipment on January 1, 20X3, for $100,000 and depreciated it on a 10-year basis, including an estimated residual value of $10,000. The residual value and estimated economic life of the equipment remained unchanged as a result of the transfer, and both companies use straight-line depreciation. Assume Putt uses the fully adjusted equity method.

Required

a. Compute the amount of income assigned to the noncontrolling interest in the consolidated income statement for 20X5.

b. Prepare a reconciliation between the balance in the Investment in Slice Company Stock account reported by Putt at December 31, 20X5, and the underlying book value of net assets reported by Slice at that date.

c. Give all consolidation entries needed to prepare a full set of consolidated financial statements at December 31, 20X5, for Putt and Slice.

d. Prepare a three-part worksheet for 20X5 in good form.

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Cash Accounts Receivable Interest & Other Receivables Inventory Land Buildings & Equipment Bond Discount Investment in Slice Company Cost of Goods Sold Depreciation Expense Interest Expense Other Expense Dividends Declared Accumulated Depreciation-Buildings & Equipment Accounts Payable Other Payables Bonds Payable Common Stock Additional Paid-in Capital Retained Earnings Sales Other Income Gain on Sole of Equipment Income from Slice Company Total $ Putt Corporation Dobit 15,850 65,000 30,000 150.000 80.000 315,000 157,630 375,000 25,000 24,000 28.000 30,000 $1,295,480 Credit $ 120.000 61,000 30,000 250,000 150,000 30,000 165,240 450.000 28,250 10,990 $1,295,480 Slice Company Dobit $ 58,000 70,000 10,000 180,000 60,000 240,000 15.000 110,000 10,000 33,000 17,000 5,000 $808,000 Crodit $ 60,000 28,000 20,000 300,000 100,000 100,000 190.400 9,600 $808,000