Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $270,000 on January 1, 20X8, when book value of Snoopy's net assets was equal to $300,000. Peanut uses the equity method to account for investments. Trial balan data for Peanut and Snoopy as of January 1, 20X8, follow: Peanut Company Snoopy Company Assets Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Accumulated Depreciation $ 55,000 50,000 100,000 270,000 225,000 700,000 $ 20,000 30,000 60,000 100,000 200,000 (10,000) 400,900) Total Assets $1,000,000 4:999,900 400,000 Liabilities and Stockholders Equity Accounts Payable Bonds Payable Common Stock Retained Earnings $ 75,000 200,000 500,000 225,000 $1,000,000 $ 25,000 75,000 200,000 100,000 Total Liabilities and Equity Required a. Prepare the journal entry on Peanut's books for the acquisition of Snoopy on January 1, 20X8. (If no entry is required for transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the initial investment in Snoopy Co. Note: Enter debits before credits. Date General Journal Debit Credit January 1 Record entry Clear entry View general journal b. Prepare a consolidation worksheet on the acquisition date, January 1, 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 Balance Sheet Worksheet 1/1/20X8 Consolidation Entries Peanut Co. Snoopy Co DR CR Consolidated 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 c. Prepare a consolidated balance sheet on the acquisition date, January 1, 20X8. (Amounts to be deducted should be indicated by a minus sign.) PEANUT COMPANY AND SUBSIDIARY Consolidated Balance Sheet 1/1/20x8 Assets Total Assets Liabilities & Equity Total Liabilities & Equity
