Reference no: EM132964708

Question - Pie Company acquired 75 percent of Strawberry Company's stock at the underlying book value on January 1, 2018. At that date, the fair value of the non-controlling interest was equal to 25 percent of the book value of Strawberry Company. Strawberry Company reported shares outstanding of $350,000 and retained earnings of $100,000. During 2018, Strawberry Company reported net income of $60,000 and paid dividends of $3,000. In 2019, Strawberry Company reported net income of $90,000 and paid dividends of $15,000. The following transactions occurred between Pie Company and Strawberry Company in 2018 and 2019: Strawberry Co. sold equipment to Pie Co. for a $42,000 gain on December 31, 2018. Strawberry Co. had originally purchased the equipment for $140,000 and it had a carrying value of $28,000 on December 31, 2018. At the time of the purchase, Pie Co. estimated that the equipment still had a seven-year remaining useful life. Pie Co. sold land costing $90,000 to Strawberry Co. on June 28, 2019, for $110,000.

Required - Give all consolidating entries needed to prepare consolidation worksheet for 2019 assuming that Pie Co. uses the fully adjusted equity method to account for its investment in Strawberry Company.