Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Pie Corporation acquired 85 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 85 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 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 $ 27,000 64,150 91,800 213,000 105,700 23,900 31,060 15,500 $ 33,680 113,000 93,000 131,000 201,430 $572,110 $572,110 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 $143,500 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 $143,500 from its separate operations for 20X5, what amount of consolidated net income would be reported for 20X5? Consolidated net income
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started