Question
b. Prepare all consolidation entries needed to prepare consolidated statements for 20X5. (If no entry is required for a transaction/event, select No journal entry required
b. Prepare all consolidation entries needed to prepare consolidated statements for 20X5. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
c. Prepare a three-part worksheet as of December 31, 20X5. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)
I particularly need help with the entry to record the excess value (differential) reclassification.
Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $147,000. On that date, the fair value of the noncontrolling interest was $36,750, and Slice reported retained earnings of $43,000 and had $94,000 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: Item 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 Sales Income from Slice Products Company Pizza Slice Corporation Products Company Debit Credit Debit Credit $ 86,000 $ 71,000 263,000 99,000 82,000 82,000 500,000 165,000 178,700 118,000 43,000 23,000 13,000 13,000 6,000 49,000 18,000 $ 187,000 $ 91,000 47,000 17,000 257,440 109,000 289,000 94,000 303,000 84,000 201,000 102,000 28,260 $1,312,700 $1,312,700 $497,000 $497,000 Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $147,000. On that date, the fair value of the noncontrolling interest was $36,750, and Slice reported retained earnings of $43,000 and had $94,000 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: Item 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 Sales Income from Slice Products Company Pizza Slice Corporation Products Company Debit Credit Debit Credit $ 86,000 $ 71,000 263,000 99,000 82,000 82,000 500,000 165,000 178,700 118,000 43,000 23,000 13,000 13,000 6,000 49,000 18,000 $ 187,000 $ 91,000 47,000 17,000 257,440 109,000 289,000 94,000 303,000 84,000 201,000 102,000 28,260 $1,312,700 $1,312,700 $497,000 $497,000
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