P5-33 Consolidation Worksheet at End of First Year of Ownership LO 5-2 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. Although goodwill is not amortized, the management of Pie concluded at December 31, 20X8, that goodwill from its purchase of Slice shares had been impaired and the correct carrying amount was $2,800. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders. Trial balance data for Pie and Slice on December 31, 20X8, are as follows: Slice Company Debit Credit $ 25,000 16,000 29,000 19,000 168,000 Item Cash Accounts Receivable Inventory Land Buildings & Equipment Investment in slice Company Cost of Goods Sold Wage Expense Depreciation Expense Interest Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Wages Payable Notes Payable Common Stock Retained Earnings Sales Income from Slice Company Pie Corporation Debit Credit $ 54,500 71,000 91,000 39,000 359,000 105, 240 119,000 36,000 21,000 8,000 9,500 39,000 $125,000 38,000 15,000 196,700 194,000 96,000 266,000 21,540 $952,240 $952,240 104,000 24,000 9,000 3,000 4,000 16,400 $ 36,000 14,000 10,000 76,400 60,000 34,000 187,000 $417,400 $417,400 Required Required: a. Record all consolidation entries needed to prepare a three-part consolidation worksheet as of December 31, 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Answer is not complete. No Entry Accounts Debit Credit A 1 32,250 Income from Slice Company Common stock Retained earnings NCI in NI of Slice Company 60,000 34,000 10,750 Dividends declared Investment in Slice Company NCI in NA of Slice Company 16,400 90,450 30,150 B 2 1,880 2,100 X Depreciation expense Goodwill impairment loss NCI in NI of Slice Company Income from Slice Company 0x OX 3 18,800 2,800 Buildings and equipment Goodwill Accumulated depreciation Investment in Slice Company NCI in NA of Slice Company 1,880 14,790 4,930 D 4 27,000 Accumulated depreciation Buildings and equipment 27,000 b. Prepare a three-part consolidation worksheet for 20X8. (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.) Answer is not complete. PIE CORPORATION AND SUBSIDIARY Worksheet for Consolidated Financial Statements December 31, 20X8 Consolidation Entries Pie Corp. Slice Co. DR CR Consolidated Income Statement Sales Less: COGS Less: Wage expense Less: Depreciation expense Less: Interest expense Less: Other expenses Less: Impairment loss Income from Slice Company Consolidated net income NCI in net income Controlling Interest in Net Income Statement of Retained Earnings Beginning balance Net income $ 0 $ 0 $ 0 $ 0 $ 0 0 $ 0 $ 0 $ 0 $ 0 $ 0 Less: Dividends declared Ending Balance $ 0 $ 0 0 $ 0 $ 0 Ending Balance $ 0 $ 0 $ 0 $ 0 $ 0 Balance Sheet Cash Accounts receivable Inventory Land Buildings and equipment Less: Accumulated depreciation Investment in Slice Company Goodwill Total Assets $ 0 $ 0 $ 0 $ 0 $ 0 Accounts payable Wages payable Notes payable Common stock Retained earnings NCI in NA of Slice Company Total Liabilities and Equity $ 0 $ 0 $ 0 $ 0 $ 0