Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $302,000 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 $302,000 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, are as follows: Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Cost of Goods Sold Depreciation Expense Selling and Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Snoopy Company Total Peanut Company Debit $ 143,000 181,000 205,000 346,000 203,000 700,000 209,000 60,000 229,000 117,000 $ 2,393,000 Credit $ 433,000 64,000 187,000 485,000 363,000 793,000 68,000 $ 2,393,000 Snoopy Company Debit $ 72,000 75,000 87,000 0 85,000 180,000 136,000 16,000 49,000 24,000 $724,000 Credit $32,000 49,000 72,000 216,000 86,000 269,000 0 $ 724,000 (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. b. Prepare a consolidation worksheet for 20X8. Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $302,000 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, are as follows: Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Cost of Goods Sold Depreciation Expense Selling and Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Snoopy Company Total Peanut Company Debit $ 143,000 181,000 205,000 346,000 203,000 700,000 209,000 60,000 229,000 117,000 $ 2,393,000 Credit $ 433,000 64,000 187,000 485,000 363,000 793,000 68,000 $ 2,393,000 Snoopy Company Debit $ 72,000 75,000 87,000 0 85,000 180,000 136,000 16,000 49,000 24,000 $724,000 Credit $32,000 49,000 72,000 216,000 86,000 269,000 0 $ 724,000 (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. b. Prepare a consolidation worksheet for 20X8.
Expert Answer:
Answer rating: 100% (QA)
SOLUTION a Journal entries for the acquisition of Snoopy on January 1 20X8 as well as any normal equ... 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
-
Draw a situation in which a companys boss is aggressive and on the other hand an other companys boss is assertive in nature. What difference will be in output of employees working in both the...
-
Consider the following graph. Add three edges weight according to your Reg No. e.g. 19-A-880 has last digit 0, 2nd last digit 8 and 3rd last digit 8. Add the required number as shown in the graph if...
-
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...
-
Write a method to take an integer array as a parameter and return how many elements having the same digits in each element in the array for example if we have array 1 1 , 4 4 , 1 4 , 2 3 , 1 2 , 5 6...
-
Explain collusion and the control activity that is most affected when it occurs.
-
Some citizens complained to city council members that there should be equal protection under the law against the occurrence of crimes. The citizens argued that this equal protection should be...
-
Comparison of FIFO, LIFO, and moving average methods In tabular form, compare the total materials cost transferred to Work in Process and the cost of the ending inventory for each method used in...
-
Craigs Cake Company has an outstanding issue of 15-year convertible bonds with a $1,000 par value. These bonds are convertible into 80 shares of common stock . They have a 13% annual coupon interest...
-
Current spot rates are given in the table below. Based on pure expectation theory, what price should a 12-month bank bill with face value of $10,000 be sold for in 2 years time? Term (year) Interest...
-
Darius Williams, 44, is a single father with three-year old twin boys, who just lost his job as a Finance Analyst. He was employed for nine (9) years with Vroom Finance, a vehicle financing company....
-
1.You have an investment that is expected to make annual payments that grow at a constant annual rate forever. The payment that occurs 4 years from now is expected to be $16.15. The payment that...
-
A ball is in a stationary condition in flowing ideal liquid, the velocity of which is V and density p. The radius of the ball is R. Find out an expression for dynamic pressure, P, on the ball and...
-
Round Rock, Inc. manufactures and sells a single product. Cost data are given below: Units Sold 20,000 Sales price per unit $ 20.00 Cost of Goods sold: Variable cost per unit Fixed Cost $ 8.00...
-
Ratio of liabilities to stockholders' equity The following data were taken from Alvarado Company's balance sheet: Dec. 31, 20Y4 Dec. 31, 20Y3 Total liabilities Total stockholders' equity $4,085,000...
-
2. Assume register x4 is 0x00000FF0 and register x16 is 0x090A0BOC before the execution of the following instruction. A transient fault causes MemWrite to be 1 when the single-cycle processor...
-
5.6.4 The pipeline shown in Fig. X5.6.3 supplies water to a hydroelectric power plant, the elevation of which is 650 m below the level of the water at intake to the pipe. If 8 per cent of this total,...
-
It's believed that as many as 23% of adults over 50 never graduated from high school. We wish to see if this percentage is the same among the 25 to 30 age group. What sample size would a to increase...
-
9.Consider the reaction 3NO2(g)+H2O=2HNO3(aq)+NO(g) where Delta H=-137 kJ.How many kilojoules are released when 92.3g of NO2 reacts?
-
Amazing Chemical Corporations president had always wanted his own yacht and crew and concluded that Amazing Chemical should diversify its investments by purchasing an existing boatyard and repair...
-
On January 1, 20X1, Priority Corporation purchased 90 percent of Tall Corporations common stock at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 10...
-
Holiday Bakery owns 60 percent of Farmco Products Companys stock. On January 1, 20X9, inventory reported by Holiday included 20,000 bags of flour purchased from Farmco at $9 per bag. By December 31,...
-
Identify the graph(s) with six edges. Use the figure shown. b a b a e F F F F d Graph S e Graph T e Graph U e Graph V Graph W
-
Name the edges in Graph \(T\). Use the figure shown. b a b a e F F F F d Graph S e Graph T e Graph U e Graph V Graph W
-
Identify any of the graphs that is a subgraph of Graph \(D\). Use the figure shown. Graph A S U Graph B S S pe 9 Graph C Graph D S
Study smarter with the SolutionInn App