Reference no: EM132884307
Question - Pie Corporation acquired 70 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 30 percent of the total book value of Slice. Slice provided the following trial balance data at December 31, 20X5:
Debit Credit
Cash $27,400
Accounts Receivable 64,150
Inventory 90,200
Buildings and Equipment (net) 216,000
Cost of Goods Sold 103,300
Depreciation Expense 23,600
Other Operating Expenses 30,620
Dividends Declared 15,900
Accounts Payable $33,680
Notes Payable 121,000
Common Stock 95,400
Retained Earnings 130,000
Sales 191,090
Total $571,170 $571,170
Required -
a. How much did Pie pay to purchase its shares of Slice?
b. If consolidated financial statements are prepared at December 31, 20X5, what amount will be assigned to the non-controlling interest in the consolidated balance sheet?
c. If Pie reported income of $141,750 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 $141,750 from its separate operations for 20X5, what amount of consolidated net income would be reported for 20X5?