BACC460

Assignment 4 (LO3)

Trial balance data for Peanut and Snoopy as of December 31, 2018 follows. Peanut company acquired 100% of the shares of Snnopy at $ (700,220) when the book value of Snoopys net assets was equal to $344,000. At that date the fair value of Building and equipment was $40,000 more than the book value. Building and equipment are depreciated on a 5-year basis. At December 31, 2018, Peanut Company concluded that good will involved in the acquisition of Snoopy has been impaired and the correct carrying value was $10,000. Peanut uses the equity method to account for investments.

	Peanut Company		Snoopy Company
	Dr	Cr	Dr	Cr
Cash	463,300*		80,000
Accounts receivable	168,000		82,000
Inventory	212,000		94,000
Investment in Snoopy	0*
Land	210,000		91,000
Building and Equipment	714,000		190,000
Cost of Goods Sold	196,000		111,000
depreciation Expense	47,000		9,000
Selling & administrative Expense	223,000		38,000
Dividends declared	90,000		27,000
Accumulated Depreciation		444,000		18,000
Accounts Payable		64,000		49,000
Bonds Payable		182,000		68,000
Common Stock		483,000		181,000
Retained Earnings		356,300		163,000
Sales		794,000		243,000
Income from Snoopy		*		0
Total	2,323,300	2,323,300	722,000	722,000

Instructions:

a) Prepare the journal entries in Peanut Company books to record the transaction related to the investment in Snoopy.

Acquisition of 100 % of shares in Snoopy for $( ** it should be around 400,000 to 700,000 according to your ids) cash

b) Post the previous transactions to the ledger and find new balances. (*) and Prepare a consolidated worksheet in good form.