Washington State University
ACCTG MISC
P5-33 Consolidation Worksheet at End of First Year of Ownership
a.
Equity Method Entries on Pie Corp.'s Books:
Investment in Slice Co. 96,000
Cash 96,000
Record the initial investment in Slice Co.
Investment in Slice Co. 18,000
Income from Slice Co. 18,000
Record Pie Corp.'s 75% share of Slice Co.'s 20X8 income
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P5-33 Consolidation Worksheet at End of First Year of Ownership
a.
Equity Method Entries on Pie Corp.'s Books:
Investment in Slice Co. 96,000
Cash 96,000
Record the initial investment in Slice Co.
Investment in Slice Co. 18,000
Income from Slice Co. 18,000
Record Pie Corp.'s 75% share of Slice Co.'s 20X8 income
Cash 12,000
Investment in Slice Co. 12,000
Record Pie Corp.'s 75% share of Slice Co.'s 20X8 dividend
Income from Slice Co. 5,625
Investment in Slice Co. 5,625
Record amortization of excess acquisition price
Book Value Calculations:
NCI
25%
+ Pie Corp.
75%
=
Commo
n
Stock
+ Retained
Earnings
Beginning book
value 25,000 75,000 60,000 40,000
+ Net Income 6,000 18,000 24,000
- Dividends (4,000) (12,000) (16,000)
Ending book value 27,000 81,000 60,000 48,000
1/1/X8
Goodwill = 6,000
Identifiable
Excess = 15,000
$96,000
Initial
investment in
Slice Co.
75%
Book value =
75,000
12/31/X8
Goodwill = 1,875
Identifiable
Excess = 13,500
$96,375
Net
investment
in Slice Co.
75%
Book value =
81,000
1
P5-33 (continued)
Basic Consolidation Entry
Common Stock
60,00
0
Retained Earnings
40,00
0
Income from Slice Co.
18,00
0
NCI in NI of Slice Co.
6,00
0
Dividends Declared 16,000
Investment in Slice Co. 81,000
NCI in NA of Slice Co. 27,000
Excess Value (Differential) Calculations:
NCI
25% + Pie Corp. 75% =
Buildings &
Equipment +
Acc.
Depr. +
Goodwil
l
Beginning balance 7,000 21,000 20,000 0 8,000
Changes (1,875) (5,625) (2,000) (5,500)
Ending balance 5,125 15,375 20,000 (2,000) 2,500
Amortized Excess Value Reclassification
Entry:
Depreciation Expense
2,00
0
Goodwill Impairment Loss
5,50
0
Income from Slice Co. 5,625
NCI in NI of Slice Co. 1,875
Excess Value (Differential) Reclassification Entry:
Buildings & Equipment 20,000
Goodwill 2,500
Acc. Depr. 2,000
Investment in Slice Co. 15,375
NCI in NA of Slice Co. 5,125
Accumulated Depreciation Consolidation Entry
Accumulated Depreciation 30,000
Building & Equipment 30,000
Investment in Income from
Slice Co. Slice Co.
Acquisition Price 96,000
75% Net Income 18,000 18,000 75% Net Income
12,000 75% Dividends
5,625 Excess Val. Amort. 5,625
Ending Balance 96,375 12,375 Ending Balance
81,000 Basic
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