Pirate Corporation acquired 60 percent ownership of Ship Company on January 1, 20X8, at underlying book value At that date, the fair value of the noncontrolling interest was equal to 40 percent of the book value of Ship Company Accumulated depreciation on Buildings and Equipment was $69,000 on the acquisition date Trial balance data at December 31, 20X8, for Pirate and Ship are as follows Pirate Corporation Ship Company Item Debit Credit Debit Credit Cash $ 32,000 $ 17,000 Accounts Receivable 69,000 27,000 Inventory 45,000 35,000 Buildings Equipment 509,000 254,000 Investment in Row Company 45,000 Investment in Ship Company 101,760 Cost of Goods Sold 142,000 102,000 Depreciation Expense 29,000 9,000 Interest Expense 6,000 3,000 Dividends Declared 28,000 26,400 Accumulated Depreciation $ 132,000 $ 78,000 Accounts Payable 61,000 18,000 Bonds Payable 117,360 112,400 Common Stock 195,000 91,000 Retained Earnings 203,000 51,000 Other Comprehensive Income from Ship Company (OCI)Unrealized Gain on Investments 6,000 Unrealized Gain on Investments (OCI) 10,000 Sales 221,000 158,000 Income from Ship Company 26,400 $ 961,760 $ 961,760 $ 518,400 $ 518,400 a Record all consolidation entries needed to prepare a three part consolidation worksheet as of December 31, 20X8 b Prepare a three part consolidation worksheet for 20X9 in good form PIE CORPORATION AND SUBSIDIARY Worksheet for Consolidated Financial Statements December 31, 20X9 Consolidation Entries Pie Corp Slice Co DR CR Consolidated Income Statement Sales Less COGS Less Wage expense Less Depreciation expense Less Interest expense Less Other expenses Income from Slice Company Consolidated net income NCI in net income Controlling Interest in Net Income Statement of Retained Earnings Beginning balance Net income Less Dividends declared Ending Balance Balance Sheet Cash Accounts receivable Inventory Land Buildings and equipment Less Accumulated depreciation Investment in Slice Company Goodwill Total Assets Accounts payable Wages payable Notes payable Common stock Retained earnings NCI in NA of Slice Company Total Liabilities and Equity c Prepare a consolidated balance sheet, income statement, and statement of comprehensive income for 20X8 PIRATE CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X8 Assets 0 $ 0 Total Assets Liabilities Stockholders' Equity Controlling Interest Total Controlling Interest 0 0 Total Stockholder's equity Total Liabilities and Stockholders' Equity $ 0 PIRATE CORPORATION AND SUBSIDIARY Consolidated Income Statement Year Ended December 31, 20X8 0 Total expenses Consolidated net income 0 Income to controlling interest $ 0 PIRATE CORPORATION AND SUBSIDIARY Consolidated Statement of Comprehensive Income Year Ended December 31, 20X8 Consolidated net income Other comprehensive income Unrealized gain on investments held by subsidiary Total consolidated comprehensive income Less Comprehensive income attributable to noncontrolling interest Comprehensive income attributable to controlling interest $ 0 PIRATE CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X8 Assets 0 $ 0 Total Assets Liabilities Stockholders' Equity Controlling Interest Total Controlling Interest 0 0 Total Stockholder's equity Total Liabilities and Stockholders' Equity $ 0 PIRATE CORPORATION AND SUBSIDIARY Consolidated Income Statement Year Ended December 31, 20X8 0 Total expenses Consolidated net income 0 Income to controlling interest $ 0 PIRATE CORPORATION AND SUBSIDIARY Consolidated Statement of Comprehensive Income Year Ended December 31, 20X8 Consolidated net income Other comprehensive income Unrealized gain on investments held by subsidiary Total consolidated comprehensive income Less Comprehensive income attributable to noncontrolling interest Comprehensive income attributable to controlling interest $ 0

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Pirate Corporation acquired 60 percent ownership of Ship Company on January 1, 20X8, at underlying book value. At that date, the fair value of the

Pirate Corporation acquired 60 percent ownership of Ship Company on January 1, 20X8, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 40 percent of the book value of Ship Company. Accumulated depreciation on Buildings and Equipment was $69,000 on the acquisition date. Trial balance data at December 31, 20X8, for Pirate and Ship are as follows: Pirate Corporation Ship Company Item Debit Credit Debit Credit Cash $ 32,000 $ 17,000 Accounts Receivable 69,000 27,000 Inventory 45,000 35,000 Buildings & Equipment 509,000 254,000 Investment in Row Company 45,000 Investment in Ship Company 101,760 Cost of Goods Sold 142,000 102,000 Depreciation Expense 29,000 9,000 Interest Expense 6,000 3,000 Dividends Declared 28,000 26,400 Accumulated Depreciation $ 132,000 $ 78,000 Accounts Payable 61,000 18,000 Bonds Payable 117,360 112,400 Common Stock 195,000 91,000 Retained Earnings 203,000 51,000 Other Comprehensive Income from Ship Company (OCI)Unrealized Gain on Investments 6,000 Unrealized Gain on Investments (OCI) 10,000 Sales 221,000 158,000 Income from Ship Company 26,400 $ 961,760 $ 961,760 $ 518,400 $ 518,400

a. Record all consolidation entries needed to prepare a three-part consolidation worksheet as of December 31, 20X8.

b. Prepare a three-part consolidation worksheet for 20X9 in good form.

PIE CORPORATION AND SUBSIDIARY
Worksheet for Consolidated Financial Statements
December 31, 20X9
			Consolidation Entries
	Pie Corp.	Slice Co.	DR	CR	Consolidated
Income Statement
Sales
Less: COGS
Less: Wage expense
Less: Depreciation expense
Less: Interest expense
Less: Other expenses
Income from Slice Company
Consolidated net income
NCI in net income
Controlling Interest in Net Income
Statement of Retained Earnings
Beginning balance
Net income
Less: Dividends declared
Ending Balance
Balance Sheet
Cash
Accounts receivable
Inventory
Land
Buildings and equipment
Less: Accumulated depreciation
Investment in Slice Company
Goodwill
Total Assets
Accounts payable
Wages payable
Notes payable
Common stock
Retained earnings
NCI in NA of Slice Company
Total Liabilities and Equity

c. Prepare a consolidated balance sheet, income statement, and statement of comprehensive income for 20X8.

image text in transcribed

PIRATE CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X8 Assets 0 $ 0 Total Assets Liabilities Stockholders' Equity: Controlling Interest: Total Controlling Interest 0 0 Total Stockholder's equity Total Liabilities and Stockholders' Equity $ 0 PIRATE CORPORATION AND SUBSIDIARY Consolidated Income Statement Year Ended December 31, 20X8 0 Total expenses Consolidated net income 0 Income to controlling interest $ 0 PIRATE CORPORATION AND SUBSIDIARY Consolidated Statement of Comprehensive Income Year Ended December 31, 20X8 Consolidated net income Other comprehensive income: Unrealized gain on investments held by subsidiary Total consolidated comprehensive income Less: Comprehensive income attributable to noncontrolling interest Comprehensive income attributable to controlling interest $ 0 PIRATE CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X8 Assets 0 $ 0 Total Assets Liabilities Stockholders' Equity: Controlling Interest: Total Controlling Interest 0 0 Total Stockholder's equity Total Liabilities and Stockholders' Equity $ 0 PIRATE CORPORATION AND SUBSIDIARY Consolidated Income Statement Year Ended December 31, 20X8 0 Total expenses Consolidated net income 0 Income to controlling interest $ 0 PIRATE CORPORATION AND SUBSIDIARY Consolidated Statement of Comprehensive Income Year Ended December 31, 20X8 Consolidated net income Other comprehensive income: Unrealized gain on investments held by subsidiary Total consolidated comprehensive income Less: Comprehensive income attributable to noncontrolling interest Comprehensive income attributable to controlling interest $ 0