Peanut Company acquired 90 percent of Snoopy Company’s outstanding common stock for $271,800 on January 1, 20X8, when the book value of Snoopy’s net assets was equal to $302,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, follow:

	Peanut Company									Snoopy Company
	Debit				Credit					Debit				Credit
Cash		$	175,000								$	80,000
Accounts Receivable			183,000									69,000
Inventory			220,000									79,000
Investment in Snoopy Company			321,300
Land			213,000									87,000
Buildings and Equipment			705,000									187,000
Cost of Goods Sold			181,000									107,000
Depreciation Expense			45,000									9,000
Selling & Administrative Expense			224,000									49,000
Dividends Declared			94,000									23,000
Accumulated Depreciation						$	442,000								$	18,000
Accounts Payable							64,000									49,000
Bonds Payable							185,000									78,000
Common Stock							486,000									197,000
Retained Earnings							323,100									105,000
Sales							791,000									243,000
Income from Snoopy Company							70,200									0
Total		$	2,361,300			$	2,361,300				$	690,000			$	690,000

Required:
a. Prepare any 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.)

b. Prepare a consolidation worksheet for 20X8. Assume the company prepares the optional Accumulated Depreciation Consolidation Entry. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)

Answer rating: 100% (QA)

Part A Event General journal Debit Credit 1 Investment in Snoopy Co 271800 Cash 271800 To record the initial investment in Snoopy Co 2 Investment in S... View the full answer