Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $287,100 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $319,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, follow: Peanut Company Snoopy Company Cash Accounts Receivable Inventory Debit $ 163,000 Credit 173,000 209,000 Debit $ 87,000 67,000 93,000 Credit Investment in Snoopy Company Land Buildings and Equipment. 342,000 205,000 714,000 93,000 192,000 Cost of Goods Sold 193,000 113,000 Depreciation Expense 42,000 10,000 selling & Administrative Expense 205,000 Dividends Declared 99,000 Accumulated Depreciation $ 443,000 Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Snoopy Company Total 32,000 22,000 $ 20,000 72,000 57,000 200,000 75,000 493,000 199,000 279,300 120,000 783,000 238,000 74,700 0 $ 2,345,000 $ 2,345,000 $ 709,000 $ 709,000 Required: a. Prepare any equity method entry(ies) related to the investment in Snoopy Company during 20X8. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $287,100 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $319,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, follow: Peanut Company Snoopy Company Cash Accounts Receivable Inventory Debit $ 163,000 Credit 173,000 209,000 Debit $ 87,000 67,000 93,000 Credit Investment in Snoopy Company Land Buildings and Equipment. 342,000 205,000 714,000 93,000 192,000 Cost of Goods Sold 193,000 113,000 Depreciation Expense 42,000 10,000 selling & Administrative Expense 205,000 Dividends Declared 99,000 Accumulated Depreciation $ 443,000 Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Snoopy Company Total 32,000 22,000 $ 20,000 72,000 57,000 200,000 75,000 493,000 199,000 279,300 120,000 783,000 238,000 74,700 0 $ 2,345,000 $ 2,345,000 $ 709,000 $ 709,000 Required: a. Prepare any equity method entry(ies) related to the investment in Snoopy Company during 20X8. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $287,100 on January 1, 20X8, when the
book value of Snoopy's net assets was equal to $319,000. Peanut uses the equity method to account for investments. Trial balance
data for Peanut and Snoopy as of December 31, 20X8, follow:
Peanut Company
Snoopy Company
Cash
Accounts Receivable
Inventory
Debit
$ 163,000
Credit
173,000
209,000
Debit
$ 87,000
67,000
93,000
Credit
Investment in Snoopy Company
Land
Buildings and Equipment.
342,000
205,000
714,000
93,000
192,000
Cost of Goods Sold
193,000
113,000
Depreciation Expense
42,000
10,000
selling & Administrative Expense
205,000
Dividends Declared
99,000
Accumulated Depreciation
$ 443,000
Accounts Payable
Bonds Payable
Common Stock
Retained Earnings
Sales
Income from Snoopy Company
Total
32,000
22,000
$ 20,000
72,000
57,000
200,000
75,000
493,000
199,000
279,300
120,000
783,000
238,000
74,700
0
$ 2,345,000
$ 2,345,000
$ 709,000
$ 709,000
Required:
a. Prepare any equity method entry(ies) related to the investment in Snoopy Company during 20X8.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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