Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $1 1 answer below »

Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $142,000. On that date, the falr value of the noncontrolling Interest was $35,500, and Slce reported retalned earnings of $40,000 and had $92,000 of common stock outstanding. PIzza has used the equlty method In accounting for its investment In Slice. Trial balance data for the two companles on December 31, 20X5, are as follows: Pizza slice rporation cts Company Produc Deb edit Item Cash & Receivables 91,eee $ 67.000 Inventory 263.000 101,000 Land 88,000 88,e0e Buildings Equipment 504,eee 157,00e Products Company Cost of Goods Sold 114,000 40,00e Depreciation Expense 10,e0e 20,00e Inventory Losses 10,eee 6,eee Dividends Declared 35,00e 21,208 reciation t pavable 13.808 Notes Payable 231,ese 133,200 Common Stock 284,0ee 92,e0e Retained Earnings 298,eee 82,00e 202,00e 108,eee Income from Slice Products Company $1,300,648 $1,300,640 $490,200 $490,200 Additional Information On the date of combination, the falr value of Slice's depreclable assets was $45,500 more than book value. The accumulated depreclation on these assets was $10,000 on the acquisltion date. The differentlal assigned to depreclable assets should be written off over the following 10-year perlod. 2. There was $12,000 of Intercorporate recelvables and payables at the end of 20X5. Required: a. Prepare all journal entries that Plzza recorded during 20×5 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 Journal entry worksheet A B Record Pizza Corporation.'s 80 % share slice Wood Company's 20X5 income. Note: Enter debits before credits. General Journal Event Debit Credit 1 Clear entry Record entry View general jourmal 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 fleld.) view transaction list Consolidation Worksheet Entries A D Record basic consolidation entry. Note: Enter debits before credits Event Accounts Debit Credit 1 Record entry Clear entry view consolidation entries c. Prepare a three-part worksheet as of December 31, 20X5. (Values in the flrst two columns (the “parent” and “subsidlary” balances) thet 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, 20×5 Consolidation Entries Pizza Corp. Slice Products Co. DR CR Consolidated Income Statement Sales Less: COGS Less: Depreciation expense Less: Inventory losses Income from Slice Products Company Consolidated net income NCI in net income Controlling Interest in Net Income 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

 

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