Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $309,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $309,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, are as follows: Snoopy Company Debit Credit $ 84,000 75,000 92,000 Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings & 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 $ 142,000 191,000 212,000 340,000 203,000 702,000 213,000 61,000 229,000 100,000 $ 446,000 74,000 182,000 486,000 349,000 788,000 58,000 $2,383,000 $2,383,000 99,000 190,000 139,000 12,000 55,000 27,000 $ 24,000 59,000 117,000 207,000 102,000 264,000 $773,000 $773,000 (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. (If no entry is required for a transaction/event, select "No to............ ALEA.....I Journal entry worksheet A B > Record the initial investment in Snoopy Company. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general journal Journal entry worksheet Record Peanut Co.'s 100% share of Snoopy Co.'s 20X8 income. Note: Enter debits before credits. Event General Journal Debit Credit 2 Record entry Clear entry View general journal Journal entry worksheet Record Peanut Co.'s 100% share of Snoopy Co.'s 20X8 dividend. Note: Enter debits before credits. Event General Journal Debit Credit 3 Record entry Clear entry View general journal b. Prepare a consolidation worksheet for 20X8. (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.) PEANUT COMPANY AND SUBSIDIARY Consolidated Financial Statements Worksheet December 31, 20X8 Consolidation Entries Peanut Co. Snoopy Co. DR CR Consolidated Income Statement Sales Less: Cost of goods sold Less: Depreciation expense Less: Selling & Administrative expense Income from Snoopy Co. Net income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Balance Sheet Assets Cash Accounts receivable Inventory Investment in Snoopy Co. Land Buildings & Equipment Less: Accumulated depreciation Total Assets Liabilities & Equity Accounts payable Bonds payable Common stock Retained earnings Total Liabilities & Equity
