Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $289,800 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $322,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, follow: Snoopy Company Debit Credit $ 74,000 65,000 88,000 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 Total Peanut Company Debit Credit $ 161,000 176,000 205,000 340,200 212,000 718,000 180,000 43,000 216,000 85,000 $ 443,000 58,000 195,000 495,000 270,600 799,000 75,600 $2,336,200 $2,336,200 85,000 193,000 117,000 9,000 31,000 28,000 $ 18,000 43,000 66,000 197,000 125,000 241,000 0 $690,000 $690,000 Record the initial investment in Snoopy Co. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record Peanut Co.'s 90% share of Snoopy Co.'s 20X8 income. 1 2 3 Record Peanut Co.'s 90% share of Snoopy Co.'s 20X8 dividend. b. Prepare a consolidation worksheet for 20X8. Assume the company prepares the optional Accumulated Depreciation Consolidation Entry. (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 December 31, 20X8 Consolidation Entries Peanut Co. Snoopy Co. DR CR Consolidated Income Statement Sales 0 0 0 0 0 $ 0 $ 0 $ 0 $ 0 $ 0 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 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Liabilities & Stockholders' Equity Accounts payable Bonds payable Common stock Retained earnings NCI in NA of Snoopy Co. Total Liabilities & Stockholders' Equity $ 0 $ 0 $ 0 $ 0 $ 0
