60.1K

Verified Solution

Link Copied!

Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $150,000. On that date, the fair value of the noncontrolling interest was $37,500, and Slice reported retained earnings of $48,000 and had $92,000 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:

11 Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20x1, for $150,000. On that date, the fair value of the noncontrolling interest was $37,500, and Slice reported retained earnings of $48,000 and had $92,000 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: 10 points Skipped Slice Products Company Debit Credit $ 71,000 91,000 80,000 164,000 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 Corporation Debit Credit 81,000 267,000 80,000 518,000 175, 160 117,000 23,000 13,000 49,000 $ 192,000 50,000 271, 160 283,000 297,000 205,000 25,000 $1,323, 160 $1,323, 160 48,000 13,000 5,000 14, 800 $ 91,000 15,000 104, 800 92,000 82,000 102,000 $486, 800 $486, 800 Additional Information 1. On the date of combination, the fair value of Slice's depreciable assets was $47,500 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. 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.) 11 1. On the date of combination, the fair value of Slice's depreciable assets was $47,500 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. 10 points 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.) Skipped View transaction list Journal entry worksheet Record Pizza Corporation's 80% share of Slice Products Company's 20X5 income. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general journal 11 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.) 10 points view transaction list Skipped Consolidation Worksheet Entries Record basic consolidation entry. Note: Enter debits before credits. Event Accounts Debit Credit 1 Record entry Clear entry view consolidation entries

Answer & Explanation Solved by verified expert

See Answer