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Pie Corporation acquired 65 percent of Slice Companys common stock on December 31, 20X5, at underlying book value. The book values and fair values of
Pie Corporation acquired 65 percent of Slice Companys common stock on December 31, 20X5, at underlying book value. The book values and fair values of Slices assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 35 percent of the total book value of Slice. Slice provided the following trial balance data at December 31, 20X5:
Pie Corporation acquired 65 percent of Slice Company's common stock on December 31, 20X5, at underlying book value. The book values and fair values of Slice's assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 35 percent of the total book value of Slice. Slice provided the following trial balance data at December 31, 2005: Credit Cash Accounts Receivable Inventory Buildings and Equipment (net) Cost of Goods Sold Depreciation Expense Other Operating Expenses Dividends Declared Accounts Payable Notes Payable Common Stock Retained Earnings Sales Total Debit $ 27,500 65,500 89,200 202,000 104,800 23,750 30,740 14,700 $ 33,200 116,000 88,200 134,500 186,290 $558,190 $558,190 Required: a. How much did Pie pay to purchase its shares of Slice? (Round your answer to nearest whole dollar amount.) Purchase price b. If consolidated financial statements are prepared at December 31, 20X5, what amount will be assigned to the noncontrolling interest in the consolidated balance sheet? (Round your answer to nearest whole dollar amount.) Noncontrolling interest c. If Pie reported income of $140,000 from its separate operations for 20X5, what amount of consolidated net income will be reported for 20X5? Consolidated net income d. If Pie had purchased its ownership of Slice on January 1, 20X5, at underlying book value and Pie reported income of $140,000 from its separate operations for 20X5, what amount of consolidated net income would be reported for 20X5? Consolidated net income
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