Question

Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $314,000 on January 1, 20x8. when the book value of Snoopy's net assets was equal to $314,000. Peanut uses the equity method to account for investments Trial balance data for Peanut and Snoopy as of December 31, 20X8, are as follows: Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings & Equipment Cost of Goods Sold Depreciation Expense Selling & Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Snoopy Company Total Peanut Company Debit Credit $ 135,000 183,000 202,000 354,000 206,000 700,000 219,000 61,000 241,000 111,000 $ 447,000 74,000 187,000 499,000 344,000 784,000 77,000 $2,412,000 $2,412,000 Snoopy Company Debit Credit $ 78,000 78,000 82,000 @ 83,000 187,000 129,000 16,000 41,000 37,000 $ 32,000 59,000 63,000 211,000 103,000 263.000 $731,000 $731,000 (Assume the company prepares the optional Accumulated Depreciation Elimination Entry) Required: a. Prepare the journal entries on Peanut's books for the acquisition of Snoopy on January 1, 20X8, as well as any normal equity method entry(ies) related to the investment in Snoopy Company during 20X8. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet

Answer 1

PEANUT COMPANY AND SUBSIDIARY Consolidated financial Statement worksheet Dec 31, 2018 Consolidated Entries Peanut Co. Snoopy co Debit Credit Consolidated Income statement Sales Cas Cent of goods sold Less Dep. Eup. les Soll- & adm. sup. Ancome from Snoopy Net Income 184,000 (219,000) (61000) (241,000) 77.000 340,000 263,000 (129,000) (16,000) (41,000) 1047,000 (348,000) (77,000) (282,000) 77,000 77,000 77,000 494,000 Statement of Rekuned Eartvigs Beginning Balence Net Income Lew Dividend Declared Ending Balance 1 43 poo 77,000 344.000 340,000 (ILL00) 573,000 103,000 77,000 (37,000 143,000 304,000 340,000 4144,000) 533,000 $37,000 37000 220,000 Balance sheet Ausets -Cash Accounts Receivable Inventory mvestment in Shoppy 135,000 183,000 202,000 354,000 78,000 78,000 82 poo -213,000 261,000 000 354,000 0

16,000 83,000 (87,000 (32000) 9 476,000 289,000 900,000 (463,000) 1,455,000 16,000 16,000 370,000 land 206,000 700,000 Bullings & Equipo Les Accuml. dep. ( 447,000) Total Disoth $1,333,000 Liabilities & Equity Accounts payable 74,000 187,000 Common Stock 499,000 Retoined Earnings 53,000 Total liability & Equity $-1333,000 Bends payable 59,000 63,000 211,000 143,000 $ 476,000 21,000 220,000 4,31,000 133000 250,000 499,000 573.000 (455,000 77,000 37.000 Rount of Event 283 ) 354,000–211,000 - 143,000 General Journal Debit Credit Cash 37,000 Investment in Snoopy 37,000 (to record Peanut Conloor-sh of Stropy con 20x8 dicsélerd) Investment in Snoopy 314,000 Common stock 314,000 ( Being Investment acquired) Entrey will be same 283