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Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $311,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $311,000. Accumulated depreciation on this date was $17,000. Peanut uses the equity method to account for investments. The following trial balance summarizes the financia position and operations for Peanut and Snoopy as of December 31, 20×9: Peanut Company Debit Credit Snoopy Company Debit Credit Cash $ 238,000 $ 80,000 Accounts Receivable 209,000 Inventory 193,000 85,000 113,000 Investment in Snoopy Company Land 443,000 0 206,000 108,000 Buildings and Equipment 709,000 216,000 Cost of Goods Sold 289,000 135,000 Depreciation Expense 59,000 17,000 Selling and Administrative Expense 248,000 77,000 Dividends Declared 226,000 37,000 Accumulated Depreciation $ 512,000 $ 51,000 Accounts Payable 57,000 33,000 Bonds Payable 135,000 75,000 Common Stock 491,000 189,000 Retained Earnings 727,000 234,000 Sales 841,000 286,000 Income from Snoopy Company 57,000 0 Total $ 2,820,000 $ 2,820,000 $ 868,000 $ 868,000 (Assume the company prepares the optional Accumulated Depreciation Elimination Entry.) Required: a. Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. b. Prepare a consolidation worksheet for 20X9.

Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $311,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $311,000. Accumulated depreciation on this date was $17,000. Peanut uses the equity method to account for investments. The following trial balance summarizes the financia position and operations for Peanut and Snoopy as of December 31, 20×9: Peanut Company Debit Credit Snoopy Company Debit Credit Cash $ 238,000 $ 80,000 Accounts Receivable 209,000 Inventory 193,000 85,000 113,000 Investment in Snoopy Company Land 443,000 0 206,000 108,000 Buildings and Equipment 709,000 216,000 Cost of Goods Sold 289,000 135,000 Depreciation Expense 59,000 17,000 Selling and Administrative Expense 248,000 77,000 Dividends Declared 226,000 37,000 Accumulated Depreciation $ 512,000 $ 51,000 Accounts Payable 57,000 33,000 Bonds Payable 135,000 75,000 Common Stock 491,000 189,000 Retained Earnings 727,000 234,000 Sales 841,000 286,000 Income from Snoopy Company 57,000 0 Total $ 2,820,000 $ 2,820,000 $ 868,000 $ 868,000 (Assume the company prepares the optional Accumulated Depreciation Elimination Entry.) Required: a. Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. b. Prepare a consolidation worksheet for 20X9.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $311,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $311,000. Accumulated depreciation on this date was $17,000. Peanut uses the equity method to account for investments. The following trial balance summarizes the financia position and operations for Peanut and Snoopy as of December 31, 20×9: Peanut Company Debit Credit Snoopy Company Debit Credit Cash $ 238,000 $ 80,000 Accounts Receivable 209,000 Inventory 193,000 85,000 113,000 Investment in Snoopy Company Land 443,000 0 206,000 108,000 Buildings and Equipment 709,000 216,000 Cost of Goods Sold 289,000 135,000 Depreciation Expense 59,000 17,000 Selling and Administrative Expense 248,000 77,000 Dividends Declared 226,000 37,000 Accumulated Depreciation $ 512,000 $ 51,000 Accounts Payable 57,000 33,000 Bonds Payable 135,000 75,000 Common Stock 491,000 189,000 Retained Earnings 727,000 234,000 Sales 841,000 286,000 Income from Snoopy Company 57,000 0 Total $ 2,820,000 $ 2,820,000 $ 868,000 $ 868,000 (Assume the company prepares the optional Accumulated Depreciation Elimination Entry.) Required: a. Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. b. Prepare a consolidation worksheet for 20X9.
Transcribed Image Text:Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $311,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $311,000. Accumulated depreciation on this date was $17,000. Peanut uses the equity method to account for investments. The following trial balance summarizes the financia position and operations for Peanut and Snoopy as of December 31, 20×9: Peanut Company Debit Credit Snoopy Company Debit Credit Cash $ 238,000 $ 80,000 Accounts Receivable 209,000 Inventory 193,000 85,000 113,000 Investment in Snoopy Company Land 443,000 0 206,000 108,000 Buildings and Equipment 709,000 216,000 Cost of Goods Sold 289,000 135,000 Depreciation Expense 59,000 17,000 Selling and Administrative Expense 248,000 77,000 Dividends Declared 226,000 37,000 Accumulated Depreciation $ 512,000 $ 51,000 Accounts Payable 57,000 33,000 Bonds Payable 135,000 75,000 Common Stock 491,000 189,000 Retained Earnings 727,000 234,000 Sales 841,000 286,000 Income from Snoopy Company 57,000 0 Total $ 2,820,000 $ 2,820,000 $ 868,000 $ 868,000 (Assume the company prepares the optional Accumulated Depreciation Elimination Entry.) Required: a. Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. b. Prepare a consolidation worksheet for 20X9.
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