Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $300,000. Accumulated depreciation on this date was $10,000. 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: 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 $ 230,000 190,000 180,000 405,000 200,000 700,000 270,000 50,000 230,000 225,000 $ 500,000 75,000 150,000 500,000 525,000 850,000 80,000 $2,680,000 $2,680,000 Snoopy Company Debit Credit $ 75,000 80,000 100,000 0 100,000 200,000 150,000 10,000 60,000 30,000 $ 30,000 35,000 85,000 200,000 155,000 300,000 0 $805,000 $805,000 (Assume the company prepares the optional Accumulated Depreciation Elimination Entry.) 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.) View transaction list > A Record Peanut Co.'s 100% share of Snoopy Co.'s 20X9 income. B Record Peanut Co.'s 100% share of Snoopy Co.'s 20X9 dividend. Credit Note : = journal entry has been entered Record entry Clear entry View general journal b. Prepare a consolidation worksheet for 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 deblt column of the worksheet. Simllarly, 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, 20x9 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 S 0 $ 0 S 0 S 0 S 0 Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance S 0 S 0 S 0 S 0 S 0 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 S 0 S 0 S 0 S 0 S S 0 S 0 S 0 S 0 S 0
