Business, 25.09.2020 01:01 michellen2020
Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $270,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $300,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of January 1, 20X8, follow:
Peanut Company Snoopy Company
Assets
Cash $55,000 $20,000
Accounts Receivable 50,000 30,000
Inventory 100,000 60,000
Investment in Snoopy Company 270,000
Land 225,000 100,000
Buildings and Equipment 700,000 100,000
Accumulated Depreciation (400,000) (10,000)
Total Assets $1,000,000 $400,000
Liabilities and Stockholders' Equity
Accounts Payable $75,000 $25,000
Bonds Payable 200,000 75,000
Common Stock 500,000 200,000
Retained Earnings 225,000 100,000
Total Liabilities and Equity $1,000,000 $400,000
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.
Answers: 3
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Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $270,000 on Janu...
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