Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $310,500 on January 1, 20X8, when th book value of Snoopy's net assets was equal to $345,000. 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 $ 174,000 181,000 211,000 353.700 206,000 707,000 187,000 41,000 220,000 89.000 $2,369,700 Credit $450,000 63,000 188,000 492,000 313,900 789,000 73.800 $2,369,700 Snoopy Company Debit $ 87,000 82,000 76,000 95,000 188,000 120,000 9,000 27,000 34,000 $718,000 Credit $ 18,000 48,000 69,000 196,000 149,000 238,000 0 $718,000 Required: 6. 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 $310,500 on January 1, 20X8, when th book value of Snoopy's net assets was equal to $345,000. 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 $ 174,000 181,000 211,000 353.700 206,000 707,000 187,000 41,000 220,000 89.000 $2,369,700 Credit $450,000 63,000 188,000 492,000 313,900 789,000 73.800 $2,369,700 Snoopy Company Debit $ 87,000 82,000 76,000 95,000 188,000 120,000 9,000 27,000 34,000 $718,000 Credit $ 18,000 48,000 69,000 196,000 149,000 238,000 0 $718,000 Required: 6. 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.
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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