Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pie Corporation acquired 80 percent of Slice Company's common stock on December 31, 20X5, at underlying book value. The book values and fair values

image text in transcribed

Pie Corporation acquired 80 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 20 percent of the total book value of Slice. Slice provided the following trial balance data at December 31, 20X5: 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 Debit $ 27,600 65,650 Credit 91,400 207,000 106,000 24,000 31,380 14,600 $ 33,560 116,000 87,600 130,500 199,970 Sales Total Required: $ 567,630 $ 567,630 a. How much did Pie pay to purchase its shares of Slice? Note: 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? Note: Round your answer to nearest whole dollar amount. c. If Pie reported income of $142,750 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 $142,750 from its separate operations for 20X5, what amount of consolidated net income would be reported for 20X5? a. Purchase price b. Noncontrolling interest c. Consolidated net income d. Consolidated net income

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting A Focus on Ethical Decision Making

Authors: Steve Jackson, Roby Sawyers, Greg Jenkins

5th edition

324663854, 978-0324663853

More Books

Students also viewed these Accounting questions