P3-27 Consolidated Worksheet at End of the First Year of Ownership (Equity Method) LO 3-4, 3-5 Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $294,300 on January 1, 20x8, when the book value of Snoopy's net assets was equal to $327,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20x8, follow: Snoopy Company Debit Credit $ 82,000 68,000 85,000 Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Cost of Goods Sold Depreciation Expense Selling & Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Snoopy Company Total Peanut Company Debit Credit $ 164,000 179,000 217,000 341,100 213,000 713,000 193,000 44,000 222,000 97,000 $ 445,000 55,000 195,000 487,000 329,300 798,000 73,800 $2,383,100 $2,383,100 83,000 194,000 108,000 9,000 40,000 30,000 $ 18,000 40,000 75,000 186,000 141,000 239,000 0 $699,000 $699,000 Required: a. Prepare any equity method entry(ies) related to the investment in Snoopy Company during 20X8. (If no entry is required for transaction/event, select "No journal entry required in the first account field.) Journal entry worksheet 2 3 > Record the initial investment in Snoopy Co. Note: Enter debits before credits Event Debit Credit 1 General Journal Investment in Snoopy Co. Cash 294,300 294,300 Record entry Clear entry View general Journal Journal entry worksheet Record Peanut Co.'s 90% share of Snoopy Co.'s 20X8 income. Note: Enter debits before credits Event General Journal Debit Credit 2 Investment in Snoopy Co. Income from Snoopy Co. Record entry Clear entry View general journal View transaction list Journal entry worksheet 2 3 Record Peanut Co.'s 90% share of Snoopy Co.'s 20X8 dividend. Note: Enter debits before credits Event General Journal Debit Credit 3 Cash Investment in Snoopy Co. Record entry Clear entry View general journal b. Prepare a consolidation worksheet for 20x8. Assume the company prepares the optional Accumulated Depreciation Consolidation Entry. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.) nces PEANUT COMPANY AND SUBSIDIARY Consolidated Financial Statement Worksheet December 31, 20X8 Consolidation Entries Peanut Co. Snoopy Co. DR CR Consolidated Income Statement Sales Less: COGS Less: Depreciation expense Less: Selling & Administrative Expense Income from Snoopy Co. Consolidated net income 0 0 0 0 0 NCI in net income Controlling Interest in Net Income $ 0 $ Os 0 $ 0 $ 0 Statement of Retained Earnings Beginning balance Net Income Less: Dividends declared Ending Balance $ 0$ 0 $ 0 $ 05 0 Balance Sheet Assets Cash IYUI HOLIVUITO $ 0 $ 0 0 $ 0 $ 0 Controlling Interest in Net Income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Balance Sheet 0 $ 0 $ 0 $ 0 $ 0 Assets Cash Accounts receivable 0 $ 0 0 $ 0 $ 0 Inventory Investment in Snoopy Co. Land Buildings and equipment Accumulated depreciation Total Assets Liabilities & Stockholders' Equity Accounts payable Bonds payable Common stock Retained earnings NCI in NA of Snoopy Co. Total Liabilities & Stockholders' Equity $ 0 $ 0 $ 0 $ 0 $ 0
