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Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $306,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $340,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, follow: 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 $ 174,000 169,000 201,000 344,700 200,000 710,000 183,000 40,000 210,000 98,000 Credit $ 437,000 58,000 182,000 482,000 308,400 793,000 69,300 $ $ 2,329,700 2,329,700 Snoopy Company Debit $ 88,000 Credit 78,000 79,000 95,000 183,000 107,000 8,000 46,000 34,000 $ 16,000 43,000 81,000 181,000 159,000 238,000 0 $718,000 $ 718,000

Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $306,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $340,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, follow: 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 $ 174,000 169,000 201,000 344,700 200,000 710,000 183,000 40,000 210,000 98,000 Credit $ 437,000 58,000 182,000 482,000 308,400 793,000 69,300 $ $ 2,329,700 2,329,700 Snoopy Company Debit $ 88,000 Credit 78,000 79,000 95,000 183,000 107,000 8,000 46,000 34,000 $ 16,000 43,000 81,000 181,000 159,000 238,000 0 $718,000 $ 718,000

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 90 percent of Snoopy Company's outstanding common stock for $306,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $340,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, follow: 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 $ 174,000 169,000 201,000 344,700 200,000 710,000 183,000 40,000 210,000 98,000 $ 2,329,700 Credit $ 437,000 58,000 182,000 482,000 308,400 793,000 69,300 $ 2,329,700 Snoopy Company Debit Credit $ 88,000 78,000 79,000 95,000 183,000 107,000 8,000 46,000 34,000 $ 16,000 43,000 81,000 181,000 159,000 238,000 0 $ 718,000 $ 718,000
Transcribed Image Text:Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $306,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $340,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, follow: 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 $ 174,000 169,000 201,000 344,700 200,000 710,000 183,000 40,000 210,000 98,000 $ 2,329,700 Credit $ 437,000 58,000 182,000 482,000 308,400 793,000 69,300 $ 2,329,700 Snoopy Company Debit Credit $ 88,000 78,000 79,000 95,000 183,000 107,000 8,000 46,000 34,000 $ 16,000 43,000 81,000 181,000 159,000 238,000 0 $ 718,000 $ 718,000
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. / View transaction list View journal entry worksheet 1 7 No 1 2 3 Event A B C. Show Transcribed Text Investment in Snoopy Company Cash Net income Less: Dividends declared Ending Balance Balance Sheet Assets Cash Common stock Retained earnings Investment in Snoopy Company Income from Snoopy Company Accounts receivable Inventory Investment in Snoopy Company Land Buildings and equipment Accumulated depreciation Cash Investment in Snoopy Company 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 General Journal b. Prepare a consolidation worksheet for 20X8. Assume the company prepares the optional Accumulated Depreciation Consolidation Entry. 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. Total Assets Liabilities & Stockholders' Equity Accounts payable Bonds payable PEANUT COMPANY AND SUBSIDIARY Consolidated Financial Statement Worksheet December 31, 20X8 Noncontrolling interest in net assets of Snoopy Company Total Liabilities & Stockholders' Equity Peanut Company S $ S S 01 Snoopy Company OS 0$ OS 0$ 0 0 $ Debit OS Consolidation Entries Credit OS 0$ Debit 0 OS Credit 0 $ 0 $ 0$ Ⓡ 0 Consolidated 0 $ 0 $ 0 $ 0$ 0 0 0 0
Transcribed Image Text: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. / View transaction list View journal entry worksheet 1 7 No 1 2 3 Event A B C. Show Transcribed Text Investment in Snoopy Company Cash Net income Less: Dividends declared Ending Balance Balance Sheet Assets Cash Common stock Retained earnings Investment in Snoopy Company Income from Snoopy Company Accounts receivable Inventory Investment in Snoopy Company Land Buildings and equipment Accumulated depreciation Cash Investment in Snoopy Company 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 General Journal b. Prepare a consolidation worksheet for 20X8. Assume the company prepares the optional Accumulated Depreciation Consolidation Entry. 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. Total Assets Liabilities & Stockholders' Equity Accounts payable Bonds payable PEANUT COMPANY AND SUBSIDIARY Consolidated Financial Statement Worksheet December 31, 20X8 Noncontrolling interest in net assets of Snoopy Company Total Liabilities & Stockholders' Equity Peanut Company S $ S S 01 Snoopy Company OS 0$ OS 0$ 0 0 $ Debit OS Consolidation Entries Credit OS 0$ Debit 0 OS Credit 0 $ 0 $ 0$ Ⓡ 0 Consolidated 0 $ 0 $ 0 $ 0$ 0 0 0 0
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