Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $314,000 on January 1, 20x8. when the book value of Snoopy's net assets was equal to $314,000. Peanut uses the equity method to account for investments Trial balance data for Peanut and Snoopy as of December 31, 20X8, are as follows: 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 $ 135,000 183,000 202,000 354,000 206,000 700,000 219,000 61,000 241,000 111,000 $ 447,000 74,000 187,000 499,000 344,000 784,000 77,000 $2,412,000 $2,412,000 Snoopy Company Debit Credit $ 78,000 78,000 82,000 @ 83,000 187,000 129,000 16,000 41,000 37,000 $ 32,000 59,000 63,000 211,000 103,000 263.000 $731,000 $731,000 (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 journal entry required in the first account field.) View transaction list Journal entry worksheet View transaction list Journal entry worksheet K B Record the initial investment in Snoopy Company. Note: Enter debits before credits. Debit Credit Event General Journal 1 View general journal Clear entry Record entry Journal entry worksheet A B C Record Peanut Co.'s 100% share of Snoopy Co.'s 20x8 income. Note: Enter debits before credits. General Journal Debit Credit Event 2 View general journal Clear entry Record entry Journal entry worksheet K A B Record Peanut Co.'s 100% share of Snoopy Co.'s 20X8 dividend. Note: Enter debits before credits. Debit Credit General Journal Event 3 View general journal Clear entry Record entry Next Save & Exit Submit 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.) Consolidated PEANUT COMPANY AND SUBSIDIARY Consolidated Financial Statements Worksheet December 31, 20x8 Consolidation Entries Peanut Co. Snoopy Co. DR CR Income Statement Sales Less: Cost of goods sold Less: Depreciation expense Less: Selling & Administrative expense Income from Snoopy Co. $ 0$ 0 $ 0 $ Net Income 05 Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance 0 $ 0 0 $ 0 5 $ 0 $ Balance Sheet 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 0 0 0 $ $ 0 $ $ 0 $ 0 0$ 0 $ 0 $ $ $ 6 of 6 Next > Prev