Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $303,000 on January 1, 20x8, when the book value of Snoopy's net assets was equal to $303,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20x8, are as follows: Peanut Company Snoopy Company Debit Credit Debit Credit Cash $ 145,000 $ 81,000 Accounts Receivable 178,000 77,000 Inventory 215,000 82,000 Investment in Snoopy Company 345,000 @ Land 204,000 97,000 Buildings & Equipment 717,000 183,000 Cost of Goods Sold 207,000 132,000 Depreciation Expense 54,000 12,000 Selling & Administrative Expense 235,000 45,000 Dividends Declared 110,000 33,000 Accumulated Depreciation $ 449,000 $ 24,000 Accounts Payable 70,000 55,000 Bonds Payable 189,000 96,000 Common Stock 484,000 215,000 Retained Earnings 350,000 88,000 Sales 793,000 264,000 Income from Snoopy Company 75,000 Total $2,410,000 $2,410,000 $742,000 $742,000 @ (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 (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 entrylies) 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 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 Slaut me the company prepares the optional Accumulated Depreciation Elimination Entry) ired: pare the journal entries on Peanut's books for the acquisition of Snoopy on January 1, 20x8, as well as any normal equity method les) related to the investment in Snoopy Company during 20X8. (If no entry is required for a transaction/event, select "No al entry required" in the first account field.) ww transaction list Hournal entry worksheet Record Peanut Co.'s 100% share of Snoopy Co.'s 20X8 income. ote: Enter debits before credits Event General Journal Debit Credit 2 Record entry Clear entry View general Journal (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 C > Record Peanut Co.'s 100% share of Snoopy Co.'s 20x8 dividend. Note: Enter debits before credits. General Journal Debit Credit Event 3 Record entry Clear entry View general journal Drau 6 of 7 Navt 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 $ 05 0 $ OS 0$ 0 Statement of Retained Earnings Beginning balance Not income Less: Dividends declared Ending Balance $ 0 $ 0 $ 0 $ 0 $ 0 Balance Sheet Assets Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance $ 0 $ 0 $ 0 $ 0 $ 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 $ 0 $ 0 $ 0 $ 0 $ 0 A $ 0 $ 0 $ 0 0 0 $
