Question $5$:

Picture Company acquired $100\%$ of Speaker Company's outstanding common stock for $$300,000$ on January $1,20$X$1,$ when the book value of Speaker Company's net assets was equal to $$300,000.$ Picture Company uses the equity method to account for investments. Trial balance data for Picture Company and Speaker Company as of December $31,20$X$1,$ are as follows:

Required:

a$)$ Prepare the journal entries on Picture Company's books for the acquisition of Speaker Company on January $1,20$X$1,$ as well as any normal equity$-$method entries related to the investment in Speaker Company during $20$X$1.$

b$)$ Prepare the consolidation journal entries and a consolidation worksheet for $20$X$1.($Show your detailed computation process.$)4$:$27$ @$($

$$

$150$

$x$

$68$

Question $5$:

Picture Company acquired $100\%$ of Speaker Company's outstanding common stock for $$300,000$ on January $1,20$X$1,$ when the book value of Speaker Company's net assets was equal to $$300,000.$ Picture Company uses the equity method to account for investments. Trial balance data for Picture Company and Speaker Company as of December $31,20$X$1,$ are as follows:

$\backslash$table$[[,$Picture Company,Speaker Company$],[,,$Debit,Credit,Debit,Credit$],[$Cash$,$$$,130,000,,$$ $80,000,],[$Accounts Receivable,,$165,000,,65,000,],[$Inventory$,,200,000,,75,000,],[$Investment in Snoopy Company,,$355,000,,0,],[$Land$,,200,000,,100,000,],[$Buildings & Equipment,,$700,000,,200,000,],[$Cost of Goods Sold,,$200,000,,125,000,],[$Depreciation Expense,,$50,000,,10,000,],[$S&A Expense,,$225,000,,40,000,],[$Dividends Declared,,$100,000,,20,000,],[$Accumulated Depreciation,,,$ $450,000,,$$ $20,000],[$Accounts Payable,,,$75,000,,60,000],[$Bonds Payable,,,$200,000,,85,000],[$Common Stock,,,$500,000,,200,000],[$Retained Earnings,,,$225,000,,100,000],[$Sales$,,,800,000,,250,000],[$Income from Snoopy Company,,,$75,000,,0],[$Total$,,2,325,000,$$$2,325,000,$$$715,000,$$$715,000]]$

Required:

a$)$ Prepare the journal entries on Picture Company's books for the acquisition of Speaker Company on January $1,20$X$1,$ as well as any normal equity$-$method entries related to the investment in Speaker Company during $20$X$1.$

b$)$ Prepare the consolidation journal entries and a consolidation worksheet for $20$X$1.($Show your detailed computation process.$)$