Peanut Company acquired 80 percent of Snoopy Company's outstanding common stock for $260,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $325,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of January 1, 20X8, follow:

	Peanut Company	Snoopy Company
Assets
Cash	$257,000	$83,000
Accounts Receivable	200,000	88,000
Inventory	186,000	101,000
Investment in Snoopy Company	310,400
Land	209,000	83,000
Buildings and Equipment	713,000	192,000
Accumulated Depreciation	(400,000)	(10,000)
Total Assets	$1,000,000	$400,000
Liabilities and Stockholders' Equity
Accounts Payable	$75,000	$25,000
Bonds Payable	200,000	75,000
Common Stock	500,000	200,000
Retained Earnings	225,000	100,000
Total Liabilities and Equity	$1,000,000	$400,000

Required:

a. Prepare the journal entry on Peanut's books for the acquisition of Snoopy on January 1, 20X8.

b. Prepare a consolidation worksheet on the acquisition date, January 1, 20X8.

Answer rating: 100% (QA)

A Equity Method Journal Entries Sr Particulars Debit Credit 1 Snoopy Co Investment Cash 260000 26000... View the full answer