P5-34 Consolidation Worksheet at End of Second 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 $100,000. The book values and fair values of Slice's assets and liabilities were equal, except for Slice's buildings and equipment, which were worth $20,000 more than book value. Accumulated depreciation on the buildings and equipment was $30,000 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 $2,500. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders. Investment in Slice Co. Stock $96,375. No additional impairment occurred in 20X9. 85,000 Slice Company Debit Credit $ 32,000 14,000 24,000 25,000 150,000 Trial balance data for Pie and Slice on December 31, 20X9, are as follows: Pie Corporation Item Debit Credit Cash $ 68,500 Accounts Receivable Inventory 97,000 Land 50,000 Buildings & Equipment 350,000 Investment in Slice Company 106,875 Cost of Goods Sold 145,000 Wage Expense 35,000 Depreciation Expense 25,000 Interest Expense 12,000 Other Expenses 23,000 Dividends Declared 30,000 Accumulated Depreciation $ 170,000 Accounts Payable 51,000 Wages Payable 14,000 Notes Payable 150,000 Common Stock 200,000 Retained Earnings 126,875 Sales 290,000 Income from Slice Company 25,500 $1,027,375 $1,027,375 114,000 20,000 10,000 4,000 16,000 20,000 $ 50,000 15,000 6,000 50,000 60,000 48,000 200,000 $429,000 $429,000 Required: a. Record all consolidation entries needed to prepare a three-part consolidation worksheet as of December 31, 20X9. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction ist A Record the basic consolidation entry. > B Record the amortized excess value reclassification entry. Record the excess value (differential) reclassification entry. D Record the optional accumulated depreciation consolidation entry. Credit PIE CORPORATION AND SUBSIDIARY Worksheet for Consolidated Financial Statements December 31, 20X9 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 Income from Slice Company Consolidated net income NCI in net income Controlling Interest in Net Income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared $ 0 $ 0 $ 0 $ 0 $ 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 $ 0 $ 0$ 0 $ 0 $ 0 Total Assets Accounts payable Wages payable Notes payable Common stock Retained earnings NCI in NA of Slice Company Total Liabilities and Equity $ 0 $ $ 0 $ $ 0 c. Prepare a consolidated balance sheet, income statement, and retained earnings statement for 20X9. (Amounts to be deducted should be indicated with a minus slgn.) Answer is complete but not entirely correct. PIE CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X9 Assets Cash Accounts receivable Inventory Land Buildings and equipment Accumulated depreciation OOO Is S 100.500 99,000 121,000 75,000 490,000 220.000 X 710.000 2.500 S 1,108,000 > Goodwill Total Assets Liabilities Accounts payable Wages payable Notes payable IS OOO 66.000 20.000 200.000 S Stockholders' Equity: Controlling Interest: Common stock Retained earnings Total Controlling Interest Noncontrolling interest O O 200.000 172.375 372.375 35.625 408,000 Total Stockholder's equity Total Liabilities and Stockholders' Equity s 694,000
