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Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $152,000. On that date, the fair value of the noncontrolling
Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $152,000. On that date, the fair value of the noncontrolling interest was $38,000, and Slice reported retained earnings of $46,000 and had $96,000 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 Corporation Slice Products Company Item Debit Credit Debit Credit Cash and Receivables $ 91,000 $ 71,000 Inventory 276,000 101,000 Land 87,000 87,000 Buildings and Equipment 508,000 151,000 Investment in Slice Products Company 181,760 Cost of Goods Sold 110,000 46,000 Depreciation Expense 25,000 15,000 Inventory Losses 15,000 6,000 Dividends Declared 35,000 14,800 Accumulated Depreciation $ 188,000 $ 105,000 Accounts Payable 49,000 15,000 Notes Payable 280,800 86,800 Common Stock 285,000 96,000 Retained Earnings 299,000 86,000 Sales 202,000 103,000 Income from Slice Products Company 24,960 $ 1,328,760 $ 1,328,760 $ 491,800 $ 491,800 Additional Information 1. On the date of combination, the fair value of Slice's depreciable assets was $48,000 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. Record Pizza Corporation's 80% share of Slice Products Company's 20X5 income. Record Pizza Corporation's 80% share of Slice Company's 20X5 dividend. Record the amortization of the excess acquisition price
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