Advanced Financial Accounting (12th Edition) Chapter 3 Problem 27
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Consolidated Worksheet at End of the First Year of Ownership (Equity Method) Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $270,000 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: Peanut Company Snoopy Company Debit Credit Debit Credit Cash 158,000 80,000 Accounts Receivable 165,000 65,000 Inventory 200,000 75,000 Investment in Snoopy Stock 319,500 Land 200,000 100,000 Buildings and Equipment 700,000 200,000 Cost of Goods Sold 200,000 125,000 Depreciation Expense 50,000 10,000 Selling&Administrative Expense 225,000 40,000 Dividends Declared 100,000 20,000 Dividends Declared 100,000 20,000 Accumulated Depreciation 450,000 20,000 Accounts Payable 75,000 60,000 Bonds Payable 200,000 85,000 Common Stock 500,000 200,000 Retained Earnings 225,000 100,000 Sales 800,000 250,000 Income from Snoopy 67,500 Total 2,317,500 2,317,500 | 715,000 715,000 Required a. Prepare thejournal 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. Consolidated Worksheet at End of the First Year of Ownership (Equity Method) Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $270,000 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: Peanut Company Snoopy Company Debit Credit Debit Credit Cash 158,000 80,000 Accounts Receivable 165,000 65,000 Inventory 200,000 75,000 Investment in Snoopy Stock 319,500 Land 200,000 100,000 Buildings and Equipment 700,000 200,000 Cost of Goods Sold 200,000 125,000 Depreciation Expense 50,000 10,000 Selling&Administrative Expense 225,000 40,000 Dividends Declared 100,000 20,000 Dividends Declared 100,000 20,000 Accumulated Depreciation 450,000 20,000 Accounts Payable 75,000 60,000 Bonds Payable 200,000 85,000 Common Stock 500,000 200,000 Retained Earnings 225,000 100,000 Sales 800,000 250,000 Income from Snoopy 67,500 Total 2,317,500 2,317,500 | 715,000 715,000 Required a. Prepare thejournal 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
