Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pie Corporation acquired 85 percent of Slice Company's common stock on December 31, 2005, at underlying book value. The book values and fair values of

image text in transcribedimage text in transcribedimage text in transcribed

Pie Corporation acquired 85 percent of Slice Company's common stock on December 31, 2005, 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 15 percent of the total book value of Slice. Slice provided the following trial balance data at December 31, 20x5: 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 $ 28,600 65,350 88,200 207,000 104,500 24,300 30,820 14,300 $ 33,080 115,000 85,800 133,000 196, 190 $563,070 $563,070 Required: a. How much did Pie pay to purchase its shares of Slice? (Round your answer to nearest whole dollar amount.) Answer is complete but not entirely correct. Purchase price $ 222,819 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.) Answer is complete but not entirely correct. Noncontrolling interest $ 39,321 c. If Pie reported income of $144,750 from its separate operations for 20X5, what amount of consolidated net income will be reported for 20X5? Answer is complete and correct. Consolidated net income $ 144,750 d. If Pie had purchased its ownership of Slice on January 1, 20X5, at underlying book value and Pie reported income of $144,750 from its separate operations for 20X5, what amount of consolidated net income would be reported for 20X5? Answer is complete but not entirely correct. Consolidated net income $ 203,190

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

Students also viewed these Accounting questions

Question

14. As a result Bill Gates moved the headquarters to Washington.

Answered: 1 week ago