1. Carpenter 100 Compan y , Following are welcome Cafe S , ack with which had a 1 O 1.035 S of h the w est of Sam i Slideprocess of 33.000 2 Parthey mad e 3. Detailed a n d payables showed that showed December 2005 a $10,000 1 EEEEEE Normal No Spacing Heading 1 (v) 1. Pizza Corporation acquired 100 percent of Slice Company on January 1, 20X5, for $350,000. Following are selected account balances from Pizza and Slice Corporation as of December 31, 20X5: $ Item Current Assets Buildings & Equipment Copyrights Investment in Slice Cost of Goods Sold Pizza Corp Debit Credit 405,000 500,000 900,000 384,500 375,000 Slice Corp Debit Credit $ 110,000 180,000 400,000 60,000 220,000 100,000 30,000 100,000 30,000 80,000 $ Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Liabilities Common Stock Retained Earnings Sales Income from Slice 360,000 500,000 600,000 600,000 800,000 64,500 S 2924,500 60,000 300,000 90,000 200,000 300,000 $ 2.924,500 $ 950,000 S 950,000 Additional Information: 1. On January 1, 20x5 the fair market value of Slice's assets equaled their book value with the exception of Plant Assets (with an estimated economic life of 6 years) which had a fair market value in excess in Slice's depreciable assets of $33,000. 2. Pizza used the equity method in accounting for its investment in Slice. 3. Detailed analysis of receivables and payables showed that Slice owed Pizza $10,000 on December 31, 20X5. Required: 1). Prepare a three-part consolidation worksheet as of December 31, 20X5. (15 points) 2). Give all consolidating entries needed to prepare a full set of consolidated financial statements for 20X5. (15 points) Consolidation Entries R C R Peerless Special Consolidated 1,100,000 (475,000) Income Statement Sales Less: COGS Less: Depreciation Expense Less: Other Expenses Income from Special Foods Consolidated Net Income 800,000 (375,000) (60,000) (220,000) 64,500 209,500 300,000 (100,000) (30,000) (100,000) 70,000 Statement of Retained Earnings Beginning Balance Net Income Less: Dividends Declared Ending Balance 600,000 209,500 (80,000) 729,500 200,000 70,000 (30,000) 240,000 1 Current Assets Building & Equipment Copyright Investment in Slice 405,000 500,000 900,000 384,500 110,000 180,000 400,000 (360,000) (60,000) Less: Ascu, Depreciation Goodwill Total Assets 1,829,500 630,000 Liabilities Common Stock Retained Earnings Total Liabilities & Equity 500,000 600,000 729,500 1,829,500 300,000 90,000 240,000 630,000 1. Carpenter 100 Compan y , Following are welcome Cafe S , ack with which had a 1 O 1.035 S of h the w est of Sam i Slideprocess of 33.000 2 Parthey mad e 3. Detailed a n d payables showed that showed December 2005 a $10,000 1 EEEEEE Normal No Spacing Heading 1 (v) 1. Pizza Corporation acquired 100 percent of Slice Company on January 1, 20X5, for $350,000. Following are selected account balances from Pizza and Slice Corporation as of December 31, 20X5: $ Item Current Assets Buildings & Equipment Copyrights Investment in Slice Cost of Goods Sold Pizza Corp Debit Credit 405,000 500,000 900,000 384,500 375,000 Slice Corp Debit Credit $ 110,000 180,000 400,000 60,000 220,000 100,000 30,000 100,000 30,000 80,000 $ Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Liabilities Common Stock Retained Earnings Sales Income from Slice 360,000 500,000 600,000 600,000 800,000 64,500 S 2924,500 60,000 300,000 90,000 200,000 300,000 $ 2.924,500 $ 950,000 S 950,000 Additional Information: 1. On January 1, 20x5 the fair market value of Slice's assets equaled their book value with the exception of Plant Assets (with an estimated economic life of 6 years) which had a fair market value in excess in Slice's depreciable assets of $33,000. 2. Pizza used the equity method in accounting for its investment in Slice. 3. Detailed analysis of receivables and payables showed that Slice owed Pizza $10,000 on December 31, 20X5. Required: 1). Prepare a three-part consolidation worksheet as of December 31, 20X5. (15 points) 2). Give all consolidating entries needed to prepare a full set of consolidated financial statements for 20X5. (15 points) Consolidation Entries R C R Peerless Special Consolidated 1,100,000 (475,000) Income Statement Sales Less: COGS Less: Depreciation Expense Less: Other Expenses Income from Special Foods Consolidated Net Income 800,000 (375,000) (60,000) (220,000) 64,500 209,500 300,000 (100,000) (30,000) (100,000) 70,000 Statement of Retained Earnings Beginning Balance Net Income Less: Dividends Declared Ending Balance 600,000 209,500 (80,000) 729,500 200,000 70,000 (30,000) 240,000 1 Current Assets Building & Equipment Copyright Investment in Slice 405,000 500,000 900,000 384,500 110,000 180,000 400,000 (360,000) (60,000) Less: Ascu, Depreciation Goodwill Total Assets 1,829,500 630,000 Liabilities Common Stock Retained Earnings Total Liabilities & Equity 500,000 600,000 729,500 1,829,500 300,000 90,000 240,000 630,000
