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: 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 $ 86,000 $ 76,000 265,000 100,000 87,000 87,000 517,000 164,000 173, 180 118,000 42,000 25,000 15,000 15,000 6,000 47,000 16,400 $ 196,000 $ 105,000 46,000 16,000 261,440 112,400 294,000 91,000 308,000 81,000 201,000 101,000 26, 740 $1,333,180 $1,333,180 $506,400 $506,400 Additional Information 1. 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. 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.) View transaction list A Record Pizza Corporation's 80% share of Slice Products Company's 20x5 income. IX5 B Record Pizza Corporation's 80% share of Slice Company's 20X5 dividend. c Record the amortization of the excess acquisition price. Credit 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 A Record basic consolidation entry. ^ > V 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. CreditInstant Answers: Step-by-Step Explanations
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