Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $145,000. On that date, the fair value of the noncontrolling interest was $36,250, and Slice reported retained earnings of $42,000 and had $93,000 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: Inventory Land Item Cash & Receivables Buildings & Equipment Investment in Slice Products Company Pizza Corporation Debit $ 86,000 264,000 84,000 520,000 177,860 Credit Slice Credit Products Company Debit $ 72,000 105,000 84,000 155,000 42,000 11,000 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 113,000 21,000 11,000 5,000 31,000 22,800 $ 198,000 $ 77,000 45,000 19,000 228,760 120,800 291,000 93,000 305,000 83,000 207,000 104,000 33,100 $1,307,860 $1,307,860 $496,800 $496,800 Additional Information 1. On the date of combination, the fair value of Slice's depreciable assets was $46,250 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 $13,000 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.) View transaction list View journal entry worksheet No Event General Journal A 1 Investment in Slice Products Company Income from Slice Products Company 00 B 2 Cash Investment in Slice Products Company Debit Credit 36,800 36,800 18,240 18,240 3 Income from Slice Products Company 2,960 Investment in Slice Products Company 2,960 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.) view transaction list transaction list No Event A 1 Common stock Retained earnings B Accounts 2 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 C 3 D 4 Cash and receivables Debit Credit 93,000 83,000 36,800 22,800 158,560 39,640 13,000 13,000 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.) PIZZA CORPORATION AND SUBSIDIARY Worksheet for Consolidated Financial Statements December 31, 20X5 Consolidation Entries Pizza Corp. Slice Products Co. DR CR Consolidated Income Statement Sales Less: COGS $ 207,000 $ 104,000 (113,000) (42,000) Less: Depreciation expense (21,000) (11,000) $ 311,000 (155,000) (32,000) Less: Inventory losses (11,000) (5,000) (16,000) Income from Slice Products Company 38,800 36,800 Consolidated net income $ 98,800 $ 48,000 $ 0 $ 0 $ 144,800 NCI in net income Controlling Interest in Net Income $ 98,800 $ 48,000 $ 0 $ 0 $ 144,800 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 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0