Question
Pie Corporation acquired 70 percent of Slice Company's common stock on December 31, 20X5, at underlying book value. The book values and fair values of
Pie Corporation acquired 70 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 30 percent of the total book value of Slice. Slice provided the following trial balance data at December 31, 20X5:
DebitCreditCash$27,400Accounts Receivable64,150Inventory90,200Buildings and Equipment (net)216,000Cost of Goods Sold103,300Depreciation Expense23,600Other Operating Expenses30,620Dividends Declared15,900Accounts Payable$33,680Notes Payable121,000Common Stock95,400Retained Earnings130,000Sales191,090Total$571,170$571,170
Required:
a. How much did Pie pay to purchase its shares of Slice?(Round your answer to nearest whole dollar amount.)
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.)
c. If Pie reported income of $141,750 from its separate operations for 20X5, what amount of consolidated net income will be reported for 20X5?
d. If Pie had purchased its ownership of Slice on January 1, 20X5, at underlying book value and Pie reported income of $141,750 from its separate operations for 20X5, what amount of consolidated net income would be reported for 20X5?
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