4. 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 $94,000. The book values and fair values of Slice's assets and liabilities were equal, except for Slice's buildings and equipment, which were worth $18,800 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. [30 points] Goodwill is not amortized, Pie concluded at Dec 31, 20X8, that goodwill from its purchase of Slice shares had been impaired and the correct carrying amount was $3,400. Goodwill and goodwill impairment were assigned proportionately to the parent and NCI Remember to prepare the reconciliation tables for the book value and the differentials. Trial balance data for Pie and Slice on December 31, 20X8, are as follows: Item Cash Pie Corporation Debit Credit $ 53,500 Slice Company Debit $ 26,000 Credit Accounts Receivable 74,000 17,000 Inventory 94,000 30,000 Land 38,000 20,000 Buildings & Equipment 358,000 164,000 Investment in Slice Company 108,390 Cost of Goods Sold 118,000 103,000 Wage Expense 33,000 24,000 Depreciation Expense. 23,000 9,000 Interest Expense 10,000 3,000 Other Expenses 11,500 4,000 Dividends Declared 36,000 16,800 Accumulated Depreciation $134,000 $ 36,000 Accounts Payable 39,000 7,000 Wages Payable 8,000 3,000 Notes Payable 192,400 86,800 Common Stock 195,000 66,000 Retained Earnings 97,000 28,000 Sales 267,000 190,000 Income from Slice Company 24,990 $957,390 $957,390 $416,800 $416,800 Required: a. Record all consolidation entries needed to prepare a three-part consolidation worksheet as of December 31, 20X8. b. Prepare a three-part consolidation worksheet for 20X8 PIE CORPORATION AND SUBSIDIARY Worksheet for Consolidated Financial Statements December 31, 20X8 Consolidation Entries Pie Corp. Slice Co. DR CR Consolidated Income Statement Sales $267,000 $190,000 Less: COGS (118,000) (103,000) Less: Wage expense (33,000) (24,000) Less: Depreciation expense (23,000) (9,000) Less: Interest expense (10,000) (3,000) Less: Other expenses (11,500) (4,000) Less: Impairment loss Income from Slice Company 24,990 Consolidated net income $96,490 $47,000 NCI in net income Controlling Interest in Net Income $96,490 $47,000 Statement of Retained Earnings Beginning balance $97,000 $28,000 Net income 96,490 47,000 Less: Dividends declared (36,000) (16,800) Ending Balance Balance Sheet Cash $157,490 $58,200 $53,500 $26,000 Accounts receivable 74,000 17,000 Inventory 94,000 30,000 Land 38,000 20,000 Buildings and equipment 358,000 164,000 Less: Accumulated depreciation (134,000) (36,000) Investment in Slice Company 108,390 Goodwill Total Assets Accounts payable Wages payable Notes payable Common stock Retained earnings NCI in NA of Slice Company Total Liabilities and Equity $591,890 $221,000 $591,890 $221,000 $39,000 $7,000 8,000 3,000 192,400 86,800 195,000 66,000 157,490 58,200