Question
Pizza Corporation acquired 75 percent of Slice Corporations voting common stock on January 1, 20X4, for $347,000, when the fair value of its net identifiable
Pizza Corporation acquired 75 percent of Slice Corporations voting common stock on January 1, 20X4, for $347,000, when the fair value of its net identifiable assets was $466,000 and the fair value of the noncontrolling interest was $119,000. Slice reported common stock outstanding of $120,000 and retained earnings of $220,000. The excess of fair value over book value of Slices net assets was attributed to amortizable assets with a remaining life of 10 years. On December 31, 20X4, Slice sold a building to Pizza and recorded a gain of $24,000. Income assigned to the noncontrolling shareholders in the 20X4 consolidated income statement was $17,500. Required: a. Compute the amount of net income Slice reported for 20X4.
b. Compute the amount reported as consolidated net income if Pizza reported operating income of $239,000 for 20X4.
c. Compute the amount of income assigned to the controlling interest in the 20X4 consolidated income statement.
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