Reference no: EM132593981

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$27,300 Accounts Receivable 64,600 Inventory 90,000 Buildings and Equipment (net) 208,000 Cost of Goods Sold 106,300 Depreciation Expense 24,100 Other Operating Expenses 30,780 Dividends Declared 14,100 Accounts Payable $33,560 Notes Payable 126,000 Common Stock 84,600 Retained Earnings 129,500 Sales 191,520 Total$565,180 $565,180

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 noncontrolling interest in the consolidated balance sheet?

c. If Pie reported income of $143,000 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 $143,000 from its separate operations for 20X5, what amount of consolidated net income would be reported for 20X5?