Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $151,000. On that date, the fair value of the noncontrolling interest was $37,750, and Slice reported retained earnings of $46,000 and had $95,000 of common stock outstanding. Pizza has used the equity method in accounting for its investment in Slice. Trial balance data for the two companies on December 31, 20X5, are as follows:

Additional Information

1. On the date of combination, the fair value of Slice's depreciable assets was $47,750 more than book value. The accumulated depreciation on these assets was $10,000 on the acquisition date. The differential assigned to depreciable assets should be written off over the following 10-year period.
2. There was $12,000 of intercorporate receivables and payables at the end of 20X5.

Required: 1. Prepare all journal entries that Pizza recorded during 20X5 related to its investment in Slice.

D. Record the amortization of the excess acquisition price.

2. Prepare all consolidation entries needed to prepare consolidated statements for 20X5.:

A. Record basic consolidation entry.

B. Record the amortized excess value reclassification entry.

C. Record the excess value (differential) reclassification entry.

D. Record the entry to eliminate the intercompany accounts.

3. Prepare a three-part worksheet as of December 31, 20X5.

Item Cash & Receivables Inventory Land Buildings & Equipment Investment in Slice Products Company Cost of Goods Sold Depreciation Expense Inventory Losses Dividends Declared Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Income from Slice Products Company $ Pizza Corporation Debit Credit $ Slice Products Company Debit Credit $ 78,000 103,000 85,000 169,000 46,000 14,000 5,000 21, 200 87,000 274,000 85,000 500,000 181,340 113,000 24,000 14,000 47,000 200,000 $ 98,000 20,000 45,000 231,960 114, 200 299,000 95,000 313,000 85,000 205,000 109,000 31,380 $1,325,340 $1,325,340 $521,200 $521,200 No A B C Event 1 2 3 General Journal Investment in Slice Products Company Income from Slice Products Company Cash Investment in Slice Products Company Income from Slice Products Company Investment in Slice Products Company Debit 35,200 16,960 Credit 35,200 16,960 No A B C D Event 1 2 3 4 Accounts Common stock Retained earnings Income from Slice Products Company NCI in NI of Slice Products Company Dividends declared Investment in Slice Products Company NCI in NA of Slice Products Company Depreciation expense Income from Slice Products Company NCI in NI of Slice Products Company Buildings and equipment Accumulated depreciation Investment in Slice Products Company NCI in NA of Slice Products Company Accounts payable Cash and receivables 3 3 3 3 Debit 95,000 85,000 Credit 21,200 Income Statement Sales Less: COGS Less: Depreciation expense Less: Inventory losses Income from Slice Products 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 and receivables Inventory Land Buildings and equipment Less: Accumulated depreciation Investment in Slice Products Company Total Assets Accounts payable Notes payable Common stock Retained earnings NCI in NA of Slice Products Company Total Liabilities and Equity PIZZA CORPORATION AND SUBSIDIARY Worksheet for Consolidated Financial Statements December 31, 20X5 Pizza Corp. $ 205,000 (113,000) (24,000) (14,000) 31,380 $ 85,380 $ 85,380 $ $ $ $ Slice Products Co. $ 109,000 (46,000) (14,000) (5,000) 44,000 IS 44,000 $ 0 IS $ $ 0 $ 87,000 $ 274,000 85,000 500,000 (200,000) 181,340 927,340 $ 45,000 $ 231,960 299,000 $ 575,960 78,000 103,000 85,000 169,000 (98,000) 337,000 20,000 114,200 95,000 229,200 $ $ Consolidation Entries DR CR 0 $ 0 $ 0 $ 0 $ 0 $ 0 0 0 0 0 Consolidated $ 314,000 (159,000) (38,000) (19,000) 31,380 129,380 129,380 0 165,000 377,000 170,000 669,000 (298,000) 181,340 1,264,340 65,000 346,160 394,000 805,160 $ $ $ S $ $