Peanut Company acquired 80 percent of Snoopy Company's outstanding common stock for $260,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $325,000. Peanut uses the equity method to account for investments. The following trial balance summarizes the financial position and operations for Peanut and Snoopy as of December 31, 20X9: 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 tal Peanut Company Debit $ 264,000 204,000 184,000 325,600 213,000 719,000 325,000 42,000 214,000 214,000 $ 2,704,600 Credit $ 491,000 59,000 131,000 499,000 609,400 836,000 79,200 $ 2,704,600 Debit Snoopy Company $ 82,000 87,000 102,000 0 88,000 195,000 161,000 15,000 38,000 33,000 $ 801,000 Required: a. Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Credit $ 45,000 45,000 57,000 186,000 155,000 313,000 0 $ 801,000
Peanut Company acquired 80 percent of Snoopy Company's outstanding common stock for $260,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $325,000. Peanut uses the equity method to account for investments. The following trial balance summarizes the financial position and operations for Peanut and Snoopy as of December 31, 20X9: 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 tal Peanut Company Debit $ 264,000 204,000 184,000 325,600 213,000 719,000 325,000 42,000 214,000 214,000 $ 2,704,600 Credit $ 491,000 59,000 131,000 499,000 609,400 836,000 79,200 $ 2,704,600 Debit Snoopy Company $ 82,000 87,000 102,000 0 88,000 195,000 161,000 15,000 38,000 33,000 $ 801,000 Required: a. Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Credit $ 45,000 45,000 57,000 186,000 155,000 313,000 0 $ 801,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Peanut Company acquired 80 percent of Snoopy Company's outstanding common stock for $260,000 on January 1, 20X8, when the
book value of Snoopy's net assets was equal to $325,000. Peanut uses the equity method to account for investments. The following
trial balance summarizes the financial position and operations for Peanut and Snoopy as of December 31, 20X9:
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
$ 264,000
204,000
184,000
325,600
213,000
719,000
325,000
42,000
214,000
214,000
$ 2,704,600
Credit
$ 491,000
59,000
131,000
499,000
609,400
836,000
79,200
$ 2,704,600
Debit
Snoopy Company
$ 82,000
87,000
102,000
0
88,000
195,000
161,000
15,000
38,000
33,000
$ 801,000
Required:
a. Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Credit
$ 45,000
45,000
57,000
186,000
155,000
313,000
0
$ 801,000
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