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Pizza Corporation acquired 80 percent ownership of Slice Products Company on January 1, 20X1, for $145,000. On that date, the fair value of the noncontrolling interest was $36,250, and Slice reported retained earnings of $42,000 and had $93,000 of common stock outstanding. Pizza has used the equity method in accounting for its investment in Slice.

Trial balance data for the two companies on December 31, 20X5, are as follows:
  

Pizza
Corporation
Slice
Products Company
Item Debit Credit Debit Credit
Cash & Receivables $ 83,000 $ 79,000
Inventory 274,000 94,000
Land 80,000 80,000
Buildings & Equipment 511,000 162,000
Investment in Slice Products Company 178,020
Cost of Goods Sold 119,000 42,000
Depreciation Expense 22,000 12,000
Inventory Losses 12,000 5,000
Dividends Declared 35,000 23,600
Accumulated Depreciation $ 195,000 $ 84,000
Accounts Payable 46,000 19,000
Notes Payable 221,120 112,600
Common Stock 298,000 93,000
Retained Earnings 312,000 83,000
Sales 208,000 106,000
Income from Slice Products Company 33,900
$ 1,314,020 $ 1,314,020 $ 497,600 $ 497,600


Additional Information

  1. On the date of combination, the fair value of Slice's depreciable assets was $46,250 more than book value. The accumulated depreciation on these assets was $10,000 on the acquisition date. The differential assigned to depreciable assets should be written off over the following 10-year period.
  2. There was $11,000 of intercorporate receivables and payables at the end of 20X5.

Required:
a. Prepare all journal entries that Pizza recorded during 20X5 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.)

  • Record Pizza Corporation.'s 80% share of Slice Wood Company's 20X5 income.

Note: Enter debits before credits.

Event General Journal Debit Credit
1 Investment in Slice Products Company
Income from Slice Products Company
  • Record Pizza Corporation's 80% share of Slice Company's 20X5 dividend.

Note: Enter debits before credits.

Event General Journal Debit Credit
2 Cash 18,880
Investment in Slice Products Company 18,880
  • Record the amortization of the excess acquisition price.

Note: Enter debits before credits.

Event General Journal Debit Credit
3 Income from Slice Products Company
Investment in Slice Products Company
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