Peanut Company acquired 80 percent of Snoopy Company's outstanding common stock for $260,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $325,000. 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: $ Peanut Company Debit Credit 258,000 201,000 185,000 Snoopy Company Debit Credit $ 76,000 81,000 104,000 317,000 0 216,000 702,000 325,000 47,000 87,000 197,000 153,000 18,000 Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and 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 228,000 28,750 225,000 33,000 $ 497,000 64,000 137,000 483,000 593,000 849,000 81,000 $ 2,704,000 $ 54,000 54,000 40,750 189,000 139,000 301,000 0 Total $ 2,704,000 $777,750 $777,750 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.) Journal entry worksheet Record Peanut Co.'s share of Snoopy Co.'s 20X9 income. 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 share of Snoopy Co.'s 20X9 dividend. Note: Enter debits before credits. Event General Journal Debit Credit 2 Record entry Clear entry View general journal b. Prepare a consolidation worksheet for 20X9. Assume the company prepares the optional Accumulated Depreciation Consolidation Entry and that the depreciation expense was the same amount in both 20X8 and 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 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 Statement Worksheet January 1, 20X9 Consolidation Entries Peanut Co. Snoopy Co. DR CR Consolidated Income Statement Sales Less: COGS Less: Depreciation expense Less: Selling & Administrative Expense Income from Snoopy Co. Consolidated net income NCI in net income Controlling Interest in 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 and equipment Accumulated depreciation Total Assets Liabilities & Stockholders' Equity Accounts payable Bonds payable Common stock Retained earnings NCI in NA of Snoopy Co. Total Liabilities & Stockholders' Equity
