Pie Corporation acquired 85 percent of Slice Company’s common stock on December 31, 20X5, at underlying...

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Pie Corporation acquired 85 percent of Slice Company’s common stock on December 31, 20X5, at underlying...

Pie Corporation acquired 85 percent of Slice Company’s common stock on December 31, 20X5, at underlying book value. The book values and fair values of Slice’s assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 15 percent of the total book value of Slice. Slice provided the following trial balance data at December 31, 20X5:

	Debit		Credit
Cash	$	28,600
Accounts Receivable		65,950
Inventory		90,200
Buildings and Equipment (net)		212,000
Cost of Goods Sold		106,300
Depreciation Expense		23,900
Other Operating Expenses		31,180
Dividends Declared		14,000
Accounts Payable			$	33,200
Notes Payable				118,000
Common Stock				84,000
Retained Earnings				129,000
Sales				207,930
Total	$	572,130	$	572,130

Required:
a. How much did Pie pay to purchase its shares of Slice? (Round your answer to nearest whole dollar amount.)

b. If consolidated financial statements are prepared at December 31, 20X5, what amount will be assigned to the noncontrolling interest in the consolidated balance sheet? (Round your answer to nearest whole dollar amount.)

c. If Pie reported income of $143,750 from its separate operations for 20X5, what amount of consolidated net income will be reported for 20X5?

d. If Pie had purchased its ownership of Slice on January 1, 20X5, at underlying book value and Pie reported income of $143,750 from its separate operations for 20X5, what amount of consolidated net income would be reported for 20X5?

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Answer 1

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28600 Answer for a Cash Accounts Receivable Inventory Buildings and Equipment (net) 65950 90200 212000 396750 -33200 - 118000 Answer for d Consolidated Income of Pie: Separate Income of Pie Income from Slice company (W.N.) 143750 39,568 Total 163,385

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