Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $300,000 on January 1,...
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Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $300,000. 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 Stock Land Buildings & Equipment Cost of Goods Sold Depreciation Expense S&A Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Snoopy Total Peanut Company Debit $ 130,000 165,000 200,000 355,000 200,000 700,000 200,000 50,000 225,000 100,000 $2,325,000 Credit $ 450,000 75,000 200,000 500,000 225,000 800,000 75,000 $2,325,000 Snoopy Company Debit Credit $ 80,000 65,000 75,000 0 100,000 200,000 125,000 10,000 40,000 20,000 $715,000 $ 20,000 60,000 85,000 200,000 100,000 250,000 $715,000 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. b. Prepare a consolidation worksheet for 20X8 in good form. Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $300,000. 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 Stock Land Buildings & Equipment Cost of Goods Sold Depreciation Expense S&A Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Snoopy Total Peanut Company Debit $ 130,000 165,000 200,000 355,000 200,000 700,000 200,000 50,000 225,000 100,000 $2,325,000 Credit $ 450,000 75,000 200,000 500,000 225,000 800,000 75,000 $2,325,000 Snoopy Company Debit Credit $ 80,000 65,000 75,000 0 100,000 200,000 125,000 10,000 40,000 20,000 $715,000 $ 20,000 60,000 85,000 200,000 100,000 250,000 $715,000 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. b. Prepare a consolidation worksheet for 20X8 in good form.
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Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
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