Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $306,900 book value of...

Transcribed Image Text:

Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $306,900 book value of Snoopy's net assets was equal to $341,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, follow: Peanut Company Debit Credit Snoopy Company Debit Credit Cash $ 163,000 $ 88,000 Accounts Receivable: Inventory 184,000 72,000 210,000 85,000 Investment in Snoopy Company 352,800 Land 206,000 96,000 Buildings and Equipment 705,000 185,000 Cost of Goods Sold 197,000 111,000 Depreciation Expense 46,000 Selling & Administrative Expense 208,000 9,000 41,000 Dividends Declared 90,000 29,000 Accumulated Depreciation $ 442,000 $ 18,000 Accounts Payable 61,000 46,000 Bonds Payable 180,000. 70,000 Common Stock 491,000 193,000 Retained Earnings 323,800 148,000 Sales 792,000 241,000 Income from Snoopy Company 72,000 0 Total $2,361,800 $2,361,800 $716,000 $716,000 Required: a. Prepare any 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.) Answer is complete and correct. No Event General Journal 1 1 Investment in Snoopy Co. Debit 306,900 Credit Cash 306,900 2 2 Investment in Snoopy Co. 72,000 Income from Snoopy Co. 72,000 + 3 3 Cash Investment in Snoopy Co. 00 26,100 26,100 Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $306,900 book value of Snoopy's net assets was equal to $341,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, follow: Peanut Company Debit Credit Snoopy Company Debit Credit Cash $ 163,000 $ 88,000 Accounts Receivable: Inventory 184,000 72,000 210,000 85,000 Investment in Snoopy Company 352,800 Land 206,000 96,000 Buildings and Equipment 705,000 185,000 Cost of Goods Sold 197,000 111,000 Depreciation Expense 46,000 Selling & Administrative Expense 208,000 9,000 41,000 Dividends Declared 90,000 29,000 Accumulated Depreciation $ 442,000 $ 18,000 Accounts Payable 61,000 46,000 Bonds Payable 180,000. 70,000 Common Stock 491,000 193,000 Retained Earnings 323,800 148,000 Sales 792,000 241,000 Income from Snoopy Company 72,000 0 Total $2,361,800 $2,361,800 $716,000 $716,000 Required: a. Prepare any 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.) Answer is complete and correct. No Event General Journal 1 1 Investment in Snoopy Co. Debit 306,900 Credit Cash 306,900 2 2 Investment in Snoopy Co. 72,000 Income from Snoopy Co. 72,000 + 3 3 Cash Investment in Snoopy Co. 00 26,100 26,100