Peanut Company acquired 100 percent of Snoopy Company's outstanding 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 (Assume the company prepares the optional Accumulated Depreciation Elimination Entry) common Peanut Company Snoopy Company Debit Credit Debit Credit $ 84,000 81,000 88,000 $ 148,000 165,000 210,000 Cash Accounts Receivable Inventory Investment in Snoopy 335,000 Stock Land 215,000 716,000 213,000 62,000 93,000 183,000 142,000 19,000 Buildings & Equipment Cost of Goods Sold Depreciation Expense Selling & Administrative Expense Dividends Declared 41,000 235,000 108,000 36,000 Accumulated $ 441,000 $38,000 Depreciation Accounts Payable Bonds Payable 72,000 198,000 485,000 361,000 57,000 99,000 208,000 106,000 259,000 Common Stock Retained Earnings Sales 793,000 57,000 Income from Snoopy $2,407,000 $2,407,000 $767,000 $767,000 Total Reauired: 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 Snoopy Co. Peanut Co. DR CR Consolidated Income Statement Sales 793,000 259,000 $ 1,052,000 (213,000) Less: Cost of goods sold (142,000) (355,000) (441,000) Less: Depreciation expense (38,000) (479,000) Less: Selling & Administrative expense Income from Snoopy Co. Net income (235,000) (41,000) (276,000) 570,000 570,000 570,000 S 474,000 38,000 S 0 $ (58,000) Statement of Retained Earnings Beginning balance 106,000 106,000 361,000 $ 361,000 474,000 570,000 Net income 38,000 (58,000) (108,000) Less: Dividends declared (36,000) (144,000) Ending Balance 727,000 108,000 676,000 0 159,000 Balance Sheet Assets 148,000 232,000 Cash 84,000 .165.000. Accounts.ceceivakle. 81.000 246.000 Balance Sheet Assets Cash 148,000 84,000 232,000 Accounts receivable 165,000 81,000 246,000 Inventory 210,000 88,000 298,000 Investment in Snoopy co. 335,000 335,000 Land Buildings & Equipment Less: Accumulated depreciation Total Assets 215,000 93,000 308,000 716,000 183,000 899,000 (36,000) (441,000) (477,000) $ 1,348,000 493,000 1,841,000 Liabilities & Equity 72,000 57,000 Accounts payable 129,000 Bonds payable 297,000 198,000 99,000 Common stock 693,000 485,000 208,000 Retained earnings 727,000 108,000 159,000 Total Liabilities & Equity 1,482,000 472,000 $ 1,278,000
