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Pig Pen Corporation acquired 75% of Snoopy Company's ownership on January 1, 2022 for $96,000. At that date, the fair value of the noncontrolling interest
Pig Pen Corporation acquired 75% of Snoopy Company's ownership on January 1, 2022 for $96,000. At that date, the fair value of the noncontrolling interest was $32,000. The book value of Snoopy's net assets at acquisition was $100,000. The book values and fair values of Snoopy's assets and liabilities were equal, except for Snoopy's buildings and equipment, which were worth $10,000 more than book value. Accumulated depreciation on the buildings and equipment was $30,000 on the acquisition date. Buildings and equipment are depreciated on a 10-year basis. Management of Pig Pen Corporation concluded at December 31, 2022 that goodwill from its purchase of Snoopy shares had been impaired and the correct carrying amount was $3,000. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders. b. On the following page, complete the consolidation worksheet for 2022 in good form. Pig Pen Corporation and Snoopy Company Consolidation Worksheet December 31, 2022 Income Statement Pig Pen Snoopy Sales 520,000 180,000 Cost of goods sold (250,000) (110,000) Wage expense (84,000) (28,000) Depreciation expense (50,000) (10,000) Interest expense (24,000) (4,000) Other expenses (27,000) (5,000) Impairment loss Income from Snoopy Co. 5,250 Consolidated net income 90,250 23,000 NCI share of net income Pig Pen share of net income 90,250 23,000 Retained Earnings Statement Beginning retained earnings 204,000 40,000 Net income 90,250 23,000 Dividends (60,000) (4,000) Ending retained earnings 234,250 59,000 Balance Sheet Cash 170,000 32,000 Accounts receivable 140,000 12,000 Inventory 180,000 25,000 Land 60,000 15,000 Buildings & equipment 700,000 150,000 Accumulated depreciation (290,000) (40,000) Investment in Snoopy 98,250 Goodwill Total Assets 1,058,250 194,000 Accounts payable 90,000 16,000 Wages Payable 34,000 9,000 Notes Payable 300,000 50,000 Common stock 400,000 60,000 Retained earnings 234,250 59,000 Noncontrolling interest Total liabilities & S.E. 1,058,250 194,000 Debit Credit Consolidated
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