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Peanut Company acquired 80 percent of Snoopy Company's outstanding common stock for $284,800 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $356,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of January 1, 20X8, follow: Assets Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Accumulated Depreciation Total Assets Liabilities and Stockholders' Equity Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities and Equity Peanut Company $ 59,000 54,000 106,000 284,800 230,000 713,000 (396,000) $1,050,800 $ 72,000 195,000 496,000 287,800 $ 1,050,800 Snoopy Company $ 31,000 41,000 67,000 118,000 202,000 (7,000) $ 452,000 $ 24,000 72,000 195,000 161,000 $ 452,000 Required: a. Prepare the journal entry on Peanut's books for the acquisition of Snoopy on January 1, 20X8. b. Prepare a consolidation worksheet on the acquisition date, January 1, 20X8. c. Prepare a consolidated balance sheet on the acquisition date, January 1, 20X8.

Peanut Company acquired 80 percent of Snoopy Company's outstanding common stock for $284,800 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $356,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of January 1, 20X8, follow: Assets Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Accumulated Depreciation Total Assets Liabilities and Stockholders' Equity Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities and Equity Peanut Company $ 59,000 54,000 106,000 284,800 230,000 713,000 (396,000) $1,050,800 $ 72,000 195,000 496,000 287,800 $ 1,050,800 Snoopy Company $ 31,000 41,000 67,000 118,000 202,000 (7,000) $ 452,000 $ 24,000 72,000 195,000 161,000 $ 452,000 Required: a. Prepare the journal entry on Peanut's books for the acquisition of Snoopy on January 1, 20X8. b. Prepare a consolidation worksheet on the acquisition date, January 1, 20X8. c. Prepare a consolidated balance sheet on the acquisition date, January 1, 20X8.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Peanut Company acquired 80 percent of Snoopy Company's outstanding common stock for $284,800 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $356,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of January 1, 20X8, follow: Assets Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Accumulated Depreciation Total Assets Liabilities and Stockholders' Equity Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities and Equity Peanut Company $ 59,000 54,000 106,000 284,800 230,000 713,000 (396,000) $ 1,050,800 $ 72,000 195,000 496,000 287,800 $ 1,050,800 Snoopy Company $ 31,000 41,000 67,000 118,000 202,000 (7,000) $ 452,000 $ 24,000 72,000 195,000 161,000 $ 452,000 Required: a. Prepare the journal entry on Peanut's books for the acquisition of Snoopy on January 1, 20X8. b. Prepare a consolidation worksheet on the acquisition date, January 1, 20X8. c. Prepare a consolidated balance sheet on the acquisition date, January 1, 20X8.
Transcribed Image Text:Peanut Company acquired 80 percent of Snoopy Company's outstanding common stock for $284,800 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $356,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of January 1, 20X8, follow: Assets Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Accumulated Depreciation Total Assets Liabilities and Stockholders' Equity Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities and Equity Peanut Company $ 59,000 54,000 106,000 284,800 230,000 713,000 (396,000) $ 1,050,800 $ 72,000 195,000 496,000 287,800 $ 1,050,800 Snoopy Company $ 31,000 41,000 67,000 118,000 202,000 (7,000) $ 452,000 $ 24,000 72,000 195,000 161,000 $ 452,000 Required: a. Prepare the journal entry on Peanut's books for the acquisition of Snoopy on January 1, 20X8. b. Prepare a consolidation worksheet on the acquisition date, January 1, 20X8. c. Prepare a consolidated balance sheet on the acquisition date, January 1, 20X8.
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