P3-28 Consolidated Worksheet at End of the Second Year of Ownership (Equity Method) LO 3-4, 3-5

Peanut Company acquired 80 percent of Snoopy Companys outstanding common stock for $280,000 on January 1, 20X8, when the book value of Snoopys net assets was equal to $350,000. Peanut uses the equity method to account for investments. The following trial balance summarizes the financial position and operations for Peanut and Snoopy as of December 31, 20X9:

	Peanut Company									Snoopy Company
	Debit				Credit					Debit				Credit
Cash		$	256,000								$	87,000
Accounts Receivable			191,000									92,000
Inventory			199,000									114,000
Investment in Snoopy Company			313,600									0
Land			204,000									94,000
Buildings and Equipment			714,000									186,000
Cost of Goods Sold			350,000									163,000
Depreciation Expense			45,000									18,000
Selling & Administrative Expense			229,000									26,000
Dividends Declared			211,000									41,000
Accumulated Depreciation						$	483,000								$	54,000
Accounts Payable							56,000									54,000
Bonds Payable							143,000									73,000
Common Stock							489,000									184,000
Retained Earnings							618,400									150,000
Sales							844,000									306,000
Income from Snoopy Company							79,200									0
Total		$	2,712,600			$	2,712,600				$	821,000			$	821,000

Required: a. Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Prepare a consolidation worksheet for 20X9. Assume the company prepares the optional Accumulated Depreciation Consolidation Entry and that the depreciation expense was the same amount in both 20X8 and 20X9. (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.)