b. Prepare a consolidation worksheet for 20X9. Assume the company prepares the optional Accumulated Depreciation Consolidation Entry and that the depreciation expense was the same amount in both 20X8 and 20X9. Note: Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. PEANUT COMPANY AND SUBSIDIARY Consolidated Financial Statement Worksheet December 31, 20X9 Income Statement Sales Less: COGS Less: Depreciation expense Less: Selling & Administrative Expense Income from Snoopy Company Consolidated net income Noncontrolling interest in net income Controlling Interest in Net Income Statement of Retained Earnings Beginning balance Net Income Less: Dividends declared Ending Balance Balance Sheet Assets Cash Accounts receivable Inventory Investment in Snoopy Company Land Buildings and equipment Accumulated depreciation Total Assets Liabilities & Stockholders' Equity Accounts payable Bonds payable Common stock Retained earnings Noncontrolling interest in net assets of Snoopy Company Total Liabilities & Stockholders' Equity Peanut Company Snoopy Company Consolidation Entries Consolidated Debit Credit Peanut Company acquired 80 percent of Snoopy Company's outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $375,000. 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 Required: Peanut Company Debit Credit Debit $ 257,000 199,000 198,000 Snoopy Company $ 85,000 90,000 114,000 Credit 310,200 0 218,000 95,000 709,000 182,000 375,000 161,000 45,000 14,000 216,000 208,000 48,250 48,000 $ 486,000 $ 42,000 58,000 42,000 136,000 94,250 492,000 192,000 641,800 147,000 844,000 320,000 77,400 0 $ 2,735,200 $ 2,735,200 $ 837,250 $ 837,250 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. View transaction list 1 Record Peanut Company's share of Snoopy Company's 20X9 income. 2 Record Peanut Company's share of Snoopy Company's 20X9 dividend. >

b. Prepare a consolidation worksheet for 20X9. Assume the company prepares the optional Accumulated Depreciation Consolidation Entry and that the depreciation expense was the same amount in both 20X8 and 20X9. Note: Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. PEANUT COMPANY AND SUBSIDIARY Consolidated Financial Statement Worksheet December 31, 20X9 Income Statement Sales Less: COGS Less: Depreciation expense Less: Selling & Administrative Expense Income from Snoopy Company Consolidated net income Noncontrolling interest in net income Controlling Interest in Net Income Statement of Retained Earnings Beginning balance Net Income Less: Dividends declared Ending Balance Balance Sheet Assets Cash Accounts receivable Inventory Investment in Snoopy Company Land Buildings and equipment Accumulated depreciation Total Assets Liabilities & Stockholders' Equity Accounts payable Bonds payable Common stock Retained earnings Noncontrolling interest in net assets of Snoopy Company Total Liabilities & Stockholders' Equity Peanut Company Snoopy Company Consolidation Entries Consolidated Debit Credit Peanut Company acquired 80 percent of Snoopy Company's outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $375,000. 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 Required: Peanut Company Debit Credit Debit $ 257,000 199,000 198,000 Snoopy Company $ 85,000 90,000 114,000 Credit 310,200 0 218,000 95,000 709,000 182,000 375,000 161,000 45,000 14,000 216,000 208,000 48,250 48,000 $ 486,000 $ 42,000 58,000 42,000 136,000 94,250 492,000 192,000 641,800 147,000 844,000 320,000 77,400 0 $ 2,735,200 $ 2,735,200 $ 837,250 $ 837,250 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. View transaction list 1 Record Peanut Company's share of Snoopy Company's 20X9 income. 2 Record Peanut Company's share of Snoopy Company's 20X9 dividend. >

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

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