Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $300,000 on January 1,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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.
Expert Answer:
Answer rating: 100% (QA)
purchased Equity Method Entries on Peanut Cos Books Inv... View the full answer
Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
Posted Date:
Students also viewed these accounting questions
-
Peanut Company acquired 100 percent of Snoopy Companys outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopys net assets was equal to $300,000. Problem 2-27...
-
Peanut Company acquired 100 percent of Snoopy Companys outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopys net assets was equal to $300,000. Peanut uses the...
-
Peanut Company acquired 100 percent of Snoopy Companys outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopys net assets was equal to $300,000. Problem 2-23...
-
A sample consisting of 1.00mol Ar is expanded isothermally at 20 C from 10.0dm 3 to 30.0dm 3 (i) Reversibly, (ii) Against a constant external pressure equal to the final pressure of the gas, (iii)...
-
Cassandra Corporation, a manufacturing company, periodically invests large sums in marketable equity securities. The investment committee of the board of directors established the investment policy....
-
Suppose that the U.S. Congress imposes an increase in taxes. Use the simple macro model developed in the chapter to predict the impact of this policy on output and the current account balance.
-
What do you understand by the term Quantitative Easing (QE)? What is the theoretical basis for QE? Comment on its success or otherwise in the UK.
-
Ware Co. produces and sells motorcycle parts. On the first day of its fiscal year, Ware Co. issued $35,000,000 of five-year, 12% bonds at a market (effective) interest rate of 10%, with interest...
-
Gear 2 4. (15 points) The two-stage simple gear train has Gear 2 as the input and Gear 5 as the output. If Gear 2 has 12 teeth, Gear 3 has 24 teeth and Gear 4 has 12 teeth, and Gear 5 has 18 teeth....
-
Roedel Electronics produces tablet computer accessories, including integrated keyboard tablet stands that connect a keyboard to a tablet device and holds the device at a preferred angle for easy...
-
1. What data redundancies exist in the table below? How could those redundancies lead to inconsistencies? 2. What type of relationship is represented by the figure below? Describe the relationship...
-
You own your own firm, and you want to raise \($40\) million to fund an expansion. Currently, you own 100% of the firms equity, and the firm has no debt. To raise the \($40\) million solely through...
-
Suppose Autodesk stock has a beta of 2.40, whereas Costco stock has a beta of 0.73. If the risk-free interest rate is 6% and the expected return of the market portfolio is 11.5%, what is the expected...
-
Table 19.20 shows the sensitivity analysis for KKPs investment in Ideko. Given this information, do you recommend the acquisition of Ideko? TABLE 19.20 SPREADSHEET Sensitivity Analysis for KKP's...
-
Suppose the risk-free return is 2.3% and the market portfolio has an expected return of 7.2% and a volatility of 13.8%. Merck & Co. (Ticker: MRK) stock has a 18.2% volatility and a correlation with...
-
Suppose Wesley Publishings stock has a volatility of 55%, while Addison Printings stock has a volatility of 20%. If the correlation between these stocks is 30%, what is the volatility of the...
-
Explain each of the stages in the progression, from initiation to termination , and what kinds of communication activities take place during each stage?
-
D Which of the following is considered part of the Controlling activity of managerial accounting? O Choosing to purchase raw materials from one supplier versus another O Choosing the allocation base...
-
Ballard Corporation purchased 70 percent of Condor Companys voting shares on January 1, 20X4, at underlying book value. On that date it also purchased $100,000 par value 12 percent Condor bonds,...
-
Slanted Building Supplies purchased 32 percent of the voting shares of Flat Flooring Company in March 20X3. On December 31, 20X3, the officers of Slanted Building Supplies indicated they needed...
-
Bath Corporation acquired 80 percent of Stang Brewing Companys stock on January 1, 20X1, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 20 percent...
-
Explain how the Feds doubling of the monetarybase and government bailouts might influencethe short-run and long-run Phillips curves.Will the influence come fromchanges in the expected inflation rate,...
-
Suppose because of a recession, most state governments experience reductions in tax revenues, and respond by reducing their expenditures and increasing their taxes to keep their state budgets in...
-
Explain how large scale structural change mightinfluence the short-run and long-run Phillips curves.Will the influencecome from changes in the expected inflation rate,the natural unemployment rate,...
Study smarter with the SolutionInn App