Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $155,000. On that date, the fair value of the noncontrolling interest was $38,750, and Slice reported retained earnings of $46,000 and had $99,000 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 $48,750 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 $14,000 of intercorporate receivables and payables at the end of 20X5.

Required: a. Prepare all journal entries that Pizza recorded during 20X5 related to its investment in Slice. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Prepare all consolidation entries needed to prepare consolidated statements for 20X5. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

c. Prepare a 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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Part A

No.	Account titles and explanation	debit	credit
1.	Investment in Slice Products Company	32800
	Income from Slice Products Company ((106000-46000-13000-6000)*80%)		32800
	(to record Pizza Corporations 80% Slice Products Company 's 20X1 income
2.	Cash	15040
	Investment in Slice Products Company (18800*80%)		15040
	(To record Pizza Corporations 80% share of Slice Products Company 's 20X1 dividend)
3.	Income from Slice Products Company	3900
	Investment in Slice Products Company (48750/10*80%)		3900
	(Record amortization of excess acquisition price)

Part B

Book Value Calculations:

	NCI 20%	+	Master Corp. 80%	=	Common Stock	+	Retained Earnings
Original book value	37600	+	150400	=	99000	+	89000
+ Net Income	8200	+	32800				41000
- Dividends	(3760)	+	(15040)				(18800)
Ending book value	42040	+	168160	=	99000	+	111200

Basic elimination entry

Account titles and explanation	debit	credit
Common stock	99000
Retained earnings	89000
Income from Slice Products Company	32800
NCI in NI of Slice Products Company	8200
Dividends declared		18800
Investment in Slice Products Company		168160
NCI in NA of Slice Products Company		42040

Excess Value (Differential) Calculations:

	NCI 20%	+	Master Corp. 80%	=	Buildings & Equipment	+	Acc. Depr.
Beginning balance	8200	+	32800	=	48750		(7750)
Changes	(975)		(3900)				(4875)
Ending balance	7225		28900		48750		(12625)

Does anyone know how they solved for the Beginning Balance for Accumulated depreciation in the "Excess value (differential) calculations:" section of this example. The number is "7,750" and I can't figure out the calculation to get this amount. I can finish my own assignment once I figure out how to get this amount.

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 slice Corporation Products Company Debit Credit Debit Credit 82,000 $ 66,000 278,000 101,000 83,000 83,000 516,000 151,000 187,660 114,000 46,000 23,000 13,000 13,000 6,000 40,000 18,800 $ 204,000 $ 91,000 47,000 15,000 237,760 84,800 298,000 99,000 312,000 89,000 209,000 106,000 28,900 $1,336,660 $1,336,660 $484,800 $484,800 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 slice Corporation Products Company Debit Credit Debit Credit 82,000 $ 66,000 278,000 101,000 83,000 83,000 516,000 151,000 187,660 114,000 46,000 23,000 13,000 13,000 6,000 40,000 18,800 $ 204,000 $ 91,000 47,000 15,000 237,760 84,800 298,000 99,000 312,000 89,000 209,000 106,000 28,900 $1,336,660 $1,336,660 $484,800 $484,800