Question
I filled out some but it could be wrong. Please fill out completely and correctly Pizza Corporation acquired 80 percent ownership of Slice Products Company
I filled out some but it could be wrong. Please fill out completely and correctly
Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $145,000. On that date, the fair value of the noncontrolling interest was $36,250, and Slice reported retained earnings of $42,000 and had $93,000 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:
Pizza Corporation | Slice Products Company | ||||||||||||
Item | Debit | Credit | Debit | Credit | |||||||||
Cash & Receivables | $ | 83,000 | $ | 79,000 | |||||||||
Inventory | 274,000 | 94,000 | |||||||||||
Land | 80,000 | 80,000 | |||||||||||
Buildings & Equipment | 511,000 | 162,000 | |||||||||||
Investment in Slice Products Company | 178,020 | ||||||||||||
Cost of Goods Sold | 119,000 | 42,000 | |||||||||||
Depreciation Expense | 22,000 | 12,000 | |||||||||||
Inventory Losses | 12,000 | 5,000 | |||||||||||
Dividends Declared | 35,000 | 23,600 | |||||||||||
Accumulated Depreciation | $ | 195,000 | $ | 84,000 | |||||||||
Accounts Payable | 46,000 | 19,000 | |||||||||||
Notes Payable | 221,120 | 112,600 | |||||||||||
Common Stock | 298,000 | 93,000 | |||||||||||
Retained Earnings | 312,000 | 83,000 | |||||||||||
Sales | 208,000 | 106,000 | |||||||||||
Income from Slice Products Company | 33,900 | ||||||||||||
$ | 1,314,020 | $ | 1,314,020 | $ | 497,600 | $ | 497,600 | ||||||
Additional Information
- On the date of combination, the fair value of Slice's depreciable assets was $46,250 more than book value. The accumulated depreciation on these assets was $10,000 on the acquisition date. The differential assigned to depreciable assets should be written off over the following 10-year period.
- There was $11,000 of intercorporate receivables and payables at the end of 20X5.
Required: a. Prepare all journal entries that Pizza recorded during 20X5 related to its investment in Slice. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
- Record Pizza Corporation.'s 80% share of Slice Wood Company's 20X5 income.
Note: Enter debits before credits.
|
- Record Pizza Corporation's 80% share of Slice Company's 20X5 dividend.
Note: Enter debits before credits.
|
- Record the amortization of the excess acquisition price.
Note: Enter debits before credits.
|
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