Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $143,000 On that date, the fair value of the noncontrolling interest was $35,750, and Slice reported retained earnings of $42,000 and had $91,000 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 Pizza CorporationSlice Products CompanyItem DebitCreditDebitCredit Cash Receivables$89,000$80,000Inventory261,000102,000Land82,00082,000Buildings Equipment502,000154,000Investment in Slice Products Company173,340Cost of Goods Sold110,00042,000Depreciation Expense24,00014,000Inventory Losses14,0006,000Dividends Declared43,00017,200Accumulated Depreciation$205,000$98,000Accounts Payable59,00020,000Notes Payable201,800106,200Common Stock295,00091,000Retained Earnings309,00081,000Sales201,000101,000Income from Slice Products Company27,540$1,298,340$1,298,340$497,200$497,200 Additional Information On the date of combination, the fair value of Slice's depreciable assets was $45,750 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 There was $14,000 of intercorporate receivables and payables at the end of 20X5 Required 1 Prepare journal entries that Pizza recorded during 20X5 related to its investment in Slice 2 Prepare consolidation entries needed to prepare consolidated statements for 20X5 c 3 Prepare three part worksheet as of December 31, 20X5 (Values in the first two columns (the parent and subsidiary balances) that are to be deducted should be indicated with a minus sign, while all values in the Consolidation Entries columns should be entered as positive values For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet )

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Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $143,000. On that date, the fair value of the noncontrolling

Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $143,000. On that date, the fair value of the noncontrolling interest was $35,750, and Slice reported retained earnings of $42,000 and had $91,000 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:

Pizza

CorporationSlice

Products CompanyItem DebitCreditDebitCredit Cash & Receivables$89,000$80,000Inventory261,000102,000Land82,00082,000Buildings & Equipment502,000154,000Investment in Slice Products Company173,340Cost of Goods Sold110,00042,000Depreciation Expense24,00014,000Inventory Losses14,0006,000Dividends Declared43,00017,200Accumulated Depreciation$205,000$98,000Accounts Payable59,00020,000Notes Payable201,800106,200Common Stock295,00091,000Retained Earnings309,00081,000Sales201,000101,000Income from Slice Products Company27,540$1,298,340$1,298,340$497,200$497,200

Additional Information On the date of combination, the fair value of Slice's depreciable assets was $45,750 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.
There was $14,000 of intercorporate receivables and payables at the end of 20X5.

Required:

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

2.Prepare consolidation entries needed to prepare consolidated statements for 20X5.c. 3. Prepare three-part worksheet as of December 31, 20X5.(Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)