Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $317,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $317,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, are as follows: Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings & 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 $ 145,000 174,000 203,000 368,000 214,000 708,000 204,000 53,000 243,000 114,000 $ 437,000 59,000 192,000 483,000 385,000 796,000 74,000 $2,426,000 $2,426,000 Snoopy Company Debit Credit $ 89,000 78,000 80,000 0 92,000 190,000 126,000 10,000 43,000 23,000 $ 20,000 44,000 97,000 215,000 102,000 253,000 0 $731,000 $731,000 (Assume the company prepares the optional Accumulated Depreciation Elimination Entry) Required: a. Prepare the journal entries on Peanut's books for the acquisition of Snoopy on January 1, 20X8, as well as any normal equity method

Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $317,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $317,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, are as follows: Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings & 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 $ 145,000 174,000 203,000 368,000 214,000 708,000 204,000 53,000 243,000 114,000 $ 437,000 59,000 192,000 483,000 385,000 796,000 74,000 $2,426,000 $2,426,000 Snoopy Company Debit Credit $ 89,000 78,000 80,000 0 92,000 190,000 126,000 10,000 43,000 23,000 $ 20,000 44,000 97,000 215,000 102,000 253,000 0 $731,000 $731,000 (Assume the company prepares the optional Accumulated Depreciation Elimination Entry) Required: a. Prepare the journal entries on Peanut's books for the acquisition of Snoopy on January 1, 20X8, as well as any normal equity method

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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